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The 



Solution 



of the Social Problem 



By C. E. DIETRICH 



THE ARIEL LIBRARY SERIES. No. 22. April, 1900. Published Quarterly 

$1.00 per year. 



SCHULTE PUBLISHING CO. 

323-325 dearborn st. 

Chicago. 



Price, 25c. 



THE SOLUTION 

OF THE 

SOCIAL PROBLEM 



By C. E. DIETRICH. 



Chicago : 

THE SCHUIyTE PUBLISHING CO. 

323-325 Dearborn St. 



'->% 



[i-ibpar-y of ^ 

Two Copies 

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Copyright, i9oo, C. E. Dietrich, 

ALL RIGHTS RESERVED 



PREFACE. 



The social problem, which now interests all 
civilized nations, is a mooted question of long 
standing. We know from history that as far back 
as Aristotle's time learned men of influence tried to 
solve the riddle, but failed. 

The economic evil is one of the problems of 
political economy. Since political economy is the 
science that treats of our own doings and there is 
nothing supernatural in it, the riddle is certainly 
solvable. I venture to say that any one who will 
read this pamphlet with an honest desire to learn 
the facts in the case will become convinced that the 
solution is now an accomplished fact. 

There are men who would put under ban any 
knowledge that might affect the present social 
order. But there are, and for centuries have been, 
others who have sought the cause of the evil for the 
sole purpose of removing it, regardless of conse- 
quences. That they have failed, proves that the 



cause lies where it is least expected, that the facts 
run against preconceived opinion. Hence, in order 
to reach that cause, my argument must run counter 
to general views ; otherwise I would fail as others 
have failed. 

There are statements in this pamphlet which 
make it necessary to inform the reader that it was 
written twenty years ago. 

The Author. 



CONTENTS. 



i. 

THE HIRING OF MONEY— CAPITAL. 
II. 
BUSINESS. 
III. 
OUR MENTAL CONDITION. 
IV. 
MONEY. 
V. 
VALUE— OUR SYSTEM OF EXCHANGE— BASIS OF 
EXCHANGE— RIGHT OF POSSESSION. 
VI. 
THE REPRESENTATIVE OF LABOR — STRIKES- 
STAGNATIONS OF BUSINESS— THE ORIGIN 
OF THE ECONOMIC EVIL. 
VII. 
THE LAND QUESTION— STATE AND GOVERN- 
MENT—CONCLUSION. 



APPENDIX. 



I. THE HIRING OF MONEY 



The inequality of men has been a riddle for 
thousands of years. Back to the time of Aristotle 
great and wise men have seen that this inequality 
has some unnatural cause; and, having the welfare 
of the people at heart, they have used their mental 
powers and their influence toward remedying the 
evil. But they have failed. Wars and rebellions 
have been the outcome of this evil ; monarchies have 
been overthrown, and, vice versa, republics have 
been turned into monarchies — all in vain; the evil 
has kept on growing. 

While but forty years ago only one millionaire 
was known, there are now hundreds in every large 
city. Poverty and misery increase at the same rate. 

Everything works naturally. Whenever logical 
reasoning will not solve a question it is because we 
reason from false premises. The principal error in 
the social problem is the belief that brainwork, 
money and property are productive, and that hence 
men of intelligence and those who own property to 
some extent can exist without performing manual 
labor, without rendering any service whatsoever. 

If such were the case, the inequality of men 
would therein find an explanation, for our mental 
abilities are unequal, and this fact would bring 



8 THE SOLUTION OF THE SOCIAL PROBLEM. 

about inequality of our outward circumstances. But 
brainwork can only produce ideas, designs, plans; 
and these leave the thing unproduced. 

I do not underrate the value of brainwork. I 
only say it does not consummate, it does not give 
corporeal existence to any of the necessaries of life. 
Brains furnish food for the mind, but the social 
problem is one of food for the body. 

Brains direct every motion the hands make in 
productive work, but money and property can not 
produce anything, can not even aid in production. 
Give the most intelligent man a thousand acres of 
the best land and a million dollars of money, and 
isolate him, so that he can get none of the products 
of other men's labor, and he will soon work or starve, 
thus furnishing the actual proof that all men are de- 
pendent on manual labor for their existence. 

Nature does not oblige A to produce the neces- 
saries of life for B any more than it obliges B to 
produce them for A; and since nature can not be 
cheated out of a living— nature demands the labor 
in advance — everybody must, by right, produce to 
the amount of his consumption. 

He who does not produce as much as he con- 
sumes subsists on the products of others; and if he 
obtains such products without the knowledge and 
consent of those who have produced them, he exists 
through some sort of cheating. 

Since the civilized state requires also unpro- 
ductive labor, there are exceptions to this rule, but 
of these I will not speak now. 

How much labor does nature demand of us for 
our existence? It simply requires us to produce 



THE HIRING OF MONEY. 9 

what we consume; no more, no less. If we still 
produced independently, that is, if every family 
produced what it consumed and consumed what it 
produced, independent of others, every man would 
know from experience how much labor it requires 
to support his family. But the times of dissocialed 
labor lie far behind us. 

The people early comprehended that the neces- 
saries of life can be produced more easily, in better 
form, and in less time, when the individual engages 
in but one thing or class of things; and gradually 
they took up the mutual mode of producing. This 
mode hides the amount of labor required by the in- 
dividual. We no longer know it from experience, 
but we can find it by calculation. 

Ask the weaver, tailor, farmer, shoemaker, how 
much labor, as regards time, is required to produce 
your annual supply of cloth, to produce shoes, etc., 
etc.; with things that last for years, as household 
furniture and the like, figure the annual consump- 
tion by the time they will last ; add up all the items 
and you will find that a man's labor, without the aid 
of machines, produces more in one hundred days 
than the average family consumes in three hundred 
and sixty-five days. 

Hence, to support his family, a man must work 
one hundred days in the year, which averages two 
days a week or three hours each day. The man who 
labors ten hours every day hardly consumes one- 
third of his product. Since the other two-thirds are 
not consumed, nor given away, nor possessed by 
him, what becomes of the product? 

Another, a correlative question, may bring us 



io THE SOLUTION OF THE SOCIAL PROBLEM. 

nearer the solution. There are many who do not 
perform productive labor, they are not commis- 
sioned, they render no service whatsoever. Still 
they have superfluity and they get richer 1 every 
year. How do they get wealth? Evidently their 
means of existing and of accumulating consist in the 
two-thirds which the laboring men daily miss. 

By "cheating" we understand the willful acts 
or tricks of appropriating to one's self that which 
belongs to others. In the case of labor, suspicion of 
aim and intent is excluded by the fact that neither 
the cheated nor the cheaters know how the cheating 
is effected. Hence "cheating" is not the proper 
name for the operation. I only call it thus for want 
of a more appropriate word. 

Nobody can cheat or be cheated without some 
means being applied, and those who will not touch 
the means the cheater can not reach. Since the 
laboring men everywhere, at all times, and without 
exception, have been deprived of a large part of 
their product, the means through which they are de- 
prived consists in something of which all laboring 
men do make and always have made use. That 
"something" is money, for anything else through 
which all laboring men can and always could be 
reached does not exist. 

Since nobody intends to cheat, since neither 
party knows how those two-thirds slip away from 
the laboring men and into the hands of non-pro- 
ducers, it is evident that we are dealing with an un- 
known, but universal and never-failing system of 
robbery — a system which nobody ever intended, but 
which nevertheless exists. 



THE HIRING OF MONEY. n 

Such a system has grown out of the practice of 
hiring money. Proof that that practice is not as in- 
nocent as it is generally taken to be, lies in the fact 
that the rate of interest is restricted by law — harm- 
less doings need no restriction. But a stronger 
proof lies in the fact that we mean to restrict it but 
cannot. While the law of Illinois, for instance, 
prohibits a higher interest than ten per cent, twenty, 
thirty per cent and even higher rates are drawn 
by professional money-lenders (the manner in which 
the law is evaded is too well known to need explana- 
tion here), and thousands have been deprived of 
house and home in that way. 

Still, if the hiring of money did not have fur- 
ther bearing, it would be a matter of the borrower 
and the lender only; the poorer classes, because 
they are not trusted with loans, would not be affect- 
ed thereby. 

A direct consequence, however, of the hiring of 
money is the investing of money. Through this 
everybody, down to the poorest, is reached. Let 
us see how. The wool-grower, for instance, has so 
many thousand dollars invested in land, stock, etc. 
His investment must bring interest, and the only 
way to get it is to add it to the price of the wool. 

Here the reader may say, he cannot do this, he 
has to sell his wool at market price. This is true, but 
further on we shall see that interest makes the 
market price. 

The railroad company which forwards the wool 
to some manufacturing center has so many thou- 
sands or millions of dollars invested, and the law 
prescribes how much interest the stockholders may 



[2 THE SOLUTION OF THE SOCIAL PROBLEM. 

draw on their investments. The manufacturer of 
the cloth, the wholesale dealer, the retailer — all have 
money invested; and since the interest is added by 
percentage, it becomes compound interest with 
every addition. Buying the cloth at, say, one dollar 
per yard, we pay about thirty or thirty-five cents 
for product, and sixty to seventy cents interest. 

Here again the reader may ask, "Does the 
author expect the capitalists to furnish railroads and 
factories free of charge?" No, I must beg the 
student to read all before passing judgment on any 
part. After he has read the book through, he will 
know that I do not expect any such thing. The 
several parts of political economy are closely inter- 
woven, but cannot all be explained at the same time. 
Therefore, if the reader finds statements which run 
against his opinion, I ask him to make a note of 
them and read on. He will be apt to find the re- 
quired explanation 

Another, an indirect consequence of the hiring 
of money is rent. Being out at least sixty cents on 
every dollar they buy with, keeps the masses poor, 
deprives them of the means to buy or build houses 
for themselves. Consequently, they must rent. 
Renting to laboring men is like supplying the spring 
with water. The very ones who build the houses, 
create all wealth, (God's creations are no wealth), 
are the ones who pay the rent. The laboring men 
pay rent for their own bona fide property. 

The worst of all the consequences of the hiring 
of money is demoralization. Moral law teaches us 
to help the poor. Interest makes the poor the 
helpers, forces them to help where no help is needed, 



THE HIRING OF MONEY. 13 

compels them to make the rich richer. Since in- 
terest makes money the means of consuming with- 
out producing, piling up values without creating any, 
it creates that insatiable greed of gain, avarice, 
which stimulates and drives to all sorts of foul 
means to get money. 

The big frauds, the wholesale swindles are not 
committed because of need, like most of the small 
thefts, but for the love of money. For they are 
committed by rich men. That the thief gets not 
only the sum stolen, but, in the form of interest, 
even an annual premium on the theft — this is too 
tempting. 

This interest system demoralizes even to self- 
robbery. Few of the rich enjoy the comforts riches 
afford. Instead they will "economize" and strain 
every nerve to get richer. It is common to read of 
cases of men who died in poorhouses and left riches 
in their coffers. 

Contentment is said to be the climax of earthly 
happiness. The interest system makes content- 
ment the exception. In fact, it makes it almost an 
impossibility. Here is an example from life, which 
I have witnessed myself. A farmer who had some 
work done at a shoemaker's grumbled at the 
charges, which resulted in the following dialogue: 

Farmer — " In such hard times you ought to work 
cheaper." 

Shoemaker — ''A man who, like you, is clearing 
from three thousand to four thousand dollars a year 
has no reason to complain of hard times." 

Farmer — " And do you suppose that three 
thousand dollars pays me for my work ? " 



i 4 THE SOLUTION OF THE SOCIAL PROBLEM. 

Shoemaker — " It would satisfy me very well." 

Farmer — " You — yes, because you work with 
almost nothing, but look at the capital I am working 
with." 

Hereupon the farmer took his pencil and began 
figuring up the value of his land, buildings, stocks, 
machines, etc., and showed the sum of thirty-one 
thousand dollars invested. 

"Now, look at it/' he continued ; ''three thou- 
sand dollars does not even pay the interest on the 
investment, much less afford returns for my work. 
I keep close account. Last year, after I had taken 
out my interest, it left me just forty cents a day for 
my work. I am willing to pay you at that rate, but 
you won't accept it. I cannot hire a tramp for less 
than a dollar a day, but I — I must work for forty 
cents." 

Reader, pause a moment. All of the things the 
farmer put a valuation on are used by himself. 
Since he has not rented or hired out any of them, 
who is owing him interest? Nobody. 

What does the farmer give in return for the 
three, or four thousand dollars he pockets every 
year and calls interest ? Nothing. 

Convince the farmer that nobody is owing him 
interest and that all he makes he has for his work, 
and you will, perhaps, make him contented and 
happy. 

Since now every acre of land, every building, 
ship, article of storegoods, animal, etc., is an invest- 
ment and must bring interest, what an enormous 
sum is there to be paid every year without anything 
in return for it! And who pays it? As we have 



THE HIRING OF MONEY. 15 

seen before, the consumer. With him, though, it is 
not interest, but tribute he pays to capital ; for he 
gets nothing for it. Investment interest is simply a 
premium on wealth. 

Since all consume, all pay that tribute. But 
only the poorer classes are actually tributary. The 
booty is divided among the investors in proportion 
to their investments. He who has the most invest- 
ed draws the biggest share, while the poor, because 
they have nothing invested, are left out of the dis- 
tribution. Not even every investor becomes a 
gainer by the operation, but only those who draw 
more interest than they pay tribute. The turning 
point is where interest drawn just covers tribute 
paid. A man who lives in his own house and has 
money enough hired out or invested to bring him 
as much interest as he pays tribute gets along in 
this world just as everybody would if money had 
never been hired. 

That interest system not only rewards cheating 
and theft, it actually punishes honesty. A man may 
refrain from taking interest and rent, but that will 
not relieve him from paying tribute. He must rob 
others to come out even. If Satan himself had been 
called on to help get up a never-failing and self- 
sustaining system of robbery he could not have 
studied out a more perfect one than the one that 
has grown out of the hiring of money. 

Money seeks investment, but nobody will invest 
unless it pays the interest. As long as houses, for 
instance, rent high enough to pay a good interest 
on the investment, building will go on; but as soon 
as the rent falls short of that, building tenement 



[6 THE SOLUTION OF THE SOCIAL PROBLEM. 

houses will cease. The lumber may rot, masons 
and carpenters lie idle, but nobody will invest in 
houses until the rent has come up to a figure which 
warrants the interest. 

As with building, so with everything. Convince 
anyone that the investment he intends to make will 
not pay the interest, and he will not make the in- 
vestment. This suspends your "law of supply and 
demand;" through governing the supply, interest 
makes the price. Look to prices the world over, 
and you find the prices to correspond to the rate of 
interest everywhere. Where interest is high, prices 
are high ; where interest is low, prices are low. 

But interest can not govern demand ; hence, 
while interest makes the price, demand causes the 
fluctuation. Demand can raise the price, but a 
lower price than that which interest has made can 
not change, save in stagnations of business when 
capital does not get full interest. 

The system which robs labor is after all very 
simple. In spite of all the misery it causes, that 
system has existed before everybody's eyes for 
many centuries without being seen. How can this 
be accounted for ? 



II. CAPITAL. 



Capital presents some queer features. It is 
loved and hated at the same time and by the same 
individuals ; it is made party to a war, namely, the 
tongue and pen war of labor vs. capital ; those who 
hate it the most make war on it, love and desire it 
the most; they would like to make it their captive 
—not to punish it, much less to annihilate it, but to 
possess, love and cherish it. This sounds strange, 
but is it not a fact? 

" Cap tal " is from the Latin Capitalis, which is 
an adjective and means first in importance. As a 
noun " Capital " has no root in the ancient languages. 
The noun idea is but a few centuries old and origin- 
ated with banking. The facts respecting capital, as 
I found them in my studies, run straight against pre- 
conceived opinion, so that stating them here would 
produce a wrong impression. However, since but 
a few centuries ago no such thing as capital was 
known and since writers on political economy are 
unable to define or limit capital, I venture to say, 
that capital is an abstract idea which denominates a 
property of the money, which property though, as 
we shall see hereafter, the money does not have. 
For the present I shall speak only of a part of 
capital, namely : — 



1 8 THE SOLUTION OF THE SOCIAL PROBLEM. 
BUSINESS CAPITAL 

Which, according to common belief, is money 
invested. Consulting Webster's Dictionary, we find 
that "invest" is from the Latin investire, which 
means to clothe, to put garments on. We never do 
such a thing with money, the idea is ridiculous. 
Then what is meant by "investing money"? 

When John gives Peter two hundred dollars for a 
span of horses, they say John invests two hundred 
dollars in horses. According to that, giving money for 
something else is investing it. If money is invested 
because it has been given for something else, any 
other thing that has been given for something else 
is invested. If not, please give the reason why not. 
If John has his money in the horses, Peter has his 
horses in the money. If John is still entitled to the 
use (investment interest) of the money which is now 
Peter's, why should Peter be deprived of the use of 
the horses ? 

The total amount of money existing is by 
various authors estimated at eight billion to twelve 
billion dollars. Let it be ten times that sum. If 
you will figure up all that comes under the head of 
"investment" you will get a sum many thousand 
times larger than that of all the money existing. 
Now, can a man invest a thousand dollars when he 
has but one ? If not, how did the people manage to 
invest many thousand times more money than they 
had? 

Although according to our belief the people 
have invested even more money than there is in ex- 
istence, there are, not minding the amount in circu- 



THE HIRING OF MONEY. 19 

lation, millions and millions of dollars lying in bank 
vaults uninvested. How is this possible? 

The following illustration will explain that mys- 
tery. A gets in five thousand dollars, which he had 
hired out, and invested it in groceries, which he 
buys of B, B, who thus comes into possession of 
that money, invests it again by buying out C, the 
dry goods man, C, who now owns that money, buys 
out D, the druggist. Which one has now that 
money in his business? None of them. The money 
is now D's, the druggist, who is out of business. 
After that same money has been invested three 
times it is still out of use and ready to be invested 
again or hired out at interest. 

"Ah," says my opponent, "these are only 
changes of property, they are the same investments 
first and last." 

This is the very thing the illustration is meant 
to show — that sales and purchases are only changes 
of property and that the money is only the medium 
of exchange, the instrument by the help of which 
changes of property are effected. The sales and 
purchases in our illustration are not any different 
from all other sales and purchases. Since these are 
not investments, none are. The fact that B, C and 
D each had a stock of goods on hand does not alter 
the case, because the same money may have bou. ht 
these goods before and can buy them again. 

Still, you say, they are investments first and 
last. Please state where the investment takes its 
beginning — what act establishes the investment? 

A, B and C, each claims that his investment 
must bring him interest. Whereon is interest due 



20 THE SOLUTION OF THE SOCIAL PROBLEM 

them — on the goods that they keep for their own 
especial benefit, or on the money which is no more 
theirs? 

The farmer we met at the shoemaker's, bought 
his land thirty-five years ago at five dollars per acre. 
He values it now at sixty-five dollars per acre, and 
claims that interest is due him on that amount, "be- 
cause there is that much money in it." When or 
how did he invest the balance of sixty dollars per 
acre ? 

Money wherewith goods are bought becomes 
by that very act the property of another, the seller, 
and has consequently no further connection with 
the buyer nor the goods bought. As the auger is 
an instrument to bore holes, money is the instrument 
of exchange. As the same auger can bore many 
holes of the same size, the same money can 
exchange many stocks of goods of the same amount. 
And as the auger does not remain in the holes 
it has bored, the money does not remain in the 
goods it has exchanged. All the money existing 
is partly in circulation, and the rest stored away. 
Not a cent of it is or can be invested. 

Says my opponent: "Nobody believes that the 
money is within the goods bought, but it required 
the money to get the goods. If the goods did not 
bring the interest which otherwise the money 
would, nobody would invest his money. He would 
hire it out and that would kill business." 

This is making one crime the excuse for 
another. We have seen before, that the hiring of 
money is the foundation of a system of robbery 
which has its chief effect in investment interest. 



THE HIRING OF MONEY. 21 

Money does not produce anything, conse- 
quently it required something else to get the goods, 
namely, labor. The money was only required to 
exchange the goods. 

You make losing the money interest the excuse 
for the investment interest. But the money keeps 
on drawing interest, for the seller who receives the 
invested money will hire it out. The goods bring 
interest without being hired out (remember that 
interest makes the price). Thus the invested money 
and the goods invested in both draw interest, but 
the labor which produced both the goods and the 
money is left out in the cold. 

Stop the investing and you stop the hiring of 
money, for money is always hired to be invested. 

Do you see the fallacy of your argument? 

Since the money is not in, or in any way 
connected with the buyer or the goods bought, 
investment interest is simply a premium on wealth. 

Whether the purchase is large or small the 
nature of it is the same. We buy things everyday, 
hence know from experience that the money we 
have bought with is gone for good, and that there 
is no longer a connection between us and the 
money we have expended. In spite of our daily 
experience to the contrary, we take the investing 
of money for a fact. We actually believe what we 
are convinced is untrue. Does this not look as if 
something disturbed our brains in the exercise of 
their functions ? 



22 THE SOLUTION OF THE SOCIAL PROBLEM. 

BUSINESS. 

In order that we may live, we must consume, 
and in order that we may consume, we must produce. 
If we could live without consuming, or consume 
without producing, no one would be busy; busy- 
ness, or business — the noun is derived from the 
adjective — would not be known. Consequently, 
business is production, or, with terms reversed, 
producing the necessaries of life is the business. 
Whether we shall produce them independently or 
mutually, as we now do, is optional. Nature does 
not dictate to us in the matter. 

Independent production I call it when every 
family produces what it consumes, and consumes 
what it produces independent of others. That 
mode, because the product does not go out of his 
hands, secures to every producer the full amount 
he produces; but it keeps the mode of living down 
to simplicity. Each man can enjoy only what he 
is able to produce himself. 

Mutual production is the mode of producing 
things for one another. This mode, because the 
individual devotes his ability and energy to the 
production of but one class of things, creates the 
mechanic, the artist. It thus enables us to produce 
the necessaries of life better, in a greater variety 
and by less toil. The different vocations or divisions 
of business are called trades. 

A man's trade is his special business ; he de- 
pends on his trade for a living- This makes all 
producers dependent on one another. The shoe- 



THE HIRING OF MONEY. 23 

maker, for instance, depends on the tailor for his 
clothing, on the farmer for his produce, on the 
cabinetmaker for his furniture, etc., while the tailor, 
farmer and cabinetmaker depend on the shoe- 
maker for their boots and shoes. Thus, every labor- 
ing man is producer and consumer, business man 
and customer all in one person. Since that de- 
pendence is reciprocal, the trades work harmoni- 
ously, like so many wheels in a machine. The one 
carries the other ; the one exists through the others; 
they are as necessary to one another as they are 
dependent on one another. When one of them is 
injured or destroyed, a large class suffers, since it 
loses thexapacity of patronizing the other classes. 
All suffer more or less in consequence. 

Traffic is not one of the business divisions, 
because it does not produce anything. The dealer 
stands between producer and consumer and hands 
over the products. He performs the office of a 
servant. A servant is a necessary adjunct as far 
as service is needed, but anyone forcing himself 
on another, or on a community as a servant, is an 
intruder. 

As far as we wish to make use of things which 
we cannot raise or manufacture at home, and 
which, therefore, must be brought from other 
countries, some transporting and exchanging 
medium is required. 

Whether or not traffic in its present form is the 
proper agency may find its explanation in another 
chapter. At present we shall consider only that 
part of traffic which but forty years ago was not 
known, namely, traffic in the products of the 



24 THE SOLUTION OF THE SOCIAL PROBLEM. 

mechanic. Of this we still remember that the 
people got along as well, nay, better without it. 

The mechanic is not bound to locality; he can 
produce anywhere. Consequently, dealing in his 
products is uncalled for. Such traffic is a sort of 
pilfering, because, while there is no need of it, it 
raises the prices of the articles without increasing 
their value ; and— the dealer is not commissioned — 
it does it without consent of producer and consumer. 

Is a suit of clothing, for instance, worth more 
because it went through the hands of dealers? It 
may have become shopworn, motheaten, faded, 
while in the dealers' possession, but that does not 
add to its value. If the suit is worth what the dealer 
sells it for, it was worth it ere he got it. Conse- 
quently, the producer of the suit has been cheated 
to the amount of the dealers' profit. If the pro- 
ducer has received the value of his product, the con- 
sumer is taxed to the amount of the profit. Whether 
the producer or the consumer is the victim is, col- 
lectively, of the same import, because every pro- 
ducer is a consumer. 

Such traffic has now forced itself into every 
phase of business. The annual booty pocketed by 
such dealers amounts to millions in every city, and 
to thousands in every village. 

But this is not all. Under the mutual mode of 
producing, the individual is skilled only in his trade, 
and, since the chance of returning to independent 
production is for him cut off, his trade is his only 
means of maintaining existence. Destroy the 
trades, and you make the mechanic a mendicant, or, 
at best, a wage serf. 



THE HIRING OF MONEY. 25 

And this is what such traffic is doing, or, rather, 
has done already. Glancing back into the time 
when no such traffic was known, we behold cities 
and towns full of life, full of business. The "clap " 
of the loom, the " tick and whiz " of tools in general 
is heard in every street. There are hatters, tanners, 
furriers, locksmiths, coopers, dyers, saddlers, in 
short, mechanics of every kind. Producer and con- 
sumer stand in close touch and provide each other 
with genuine articles, which they exchange direct; 
and the farmer finds a ready home market for 
almost anything he may raise. 

True, they were tributary even then, for the 
chimera, capital, existed ; but, since the millions 
now pocketed by uncalled for dealers remained in 
their own possession, they could afford to pay the 
tribute and support a family besides. If work and 
wages are all the laboring man asks for to make him 
happy, we may call him a happy people. 

Now look at the present state of things. The 
country town is dreary, still, dead. There is 
perhaps a wagoner mending a broken wheel ; a 
blacksmith shoeing a horse ; sometimes a tailor or 
a shoemaker, patching up store goods. Only stone- 
masons and carpenters are occasionly found in 
numbers, because our "enlightened age" has not 
yet enabled us to deal in ready-made stone walls 
and houses. 

Inquire in the business part of the town, and 
they will point you to a cluster of storehouses. The 
real business men, those numerous mechanics — 
where are they ? In the factory. Are they now the 
happy people of forty years ago ? Judging from 



26 THE SOLUTION OF THE SOCIAL PROBLEM. 

the way they obey the whistle which commands 
them to go to work, and from the abject submission 
they show to superiors, I should rather call them 
slaves. Are they still mechanics? The workman- 
ship in the things we now buy shows sufficiently 
that the mechanic is gone and that the bungler takes 
his place. (Exceptions do not make the rule). 
They are factory hands. This tells it all 

In order that the people can derive a benefit 
from producing for one another, the different trades 
must be among one another, so that the products 
can be exchanged without difficulty and without 
heavy expenses. Whenever the expenses of ex- 
changing the products exceed the gain in mutual 
production, the object of the latter is frustrated. 

And this is what uncalled for traffic has accom- 
plished. It has turned the mechanics into crowds 
of wage-serfs, each class to itself and away from the 
others. In consequence of this, the different things 
which constitute a family's needs are now brought 
from all parts of the country, and, since they go 
through the hands of a number of " investors," we 
pay three times as much for the exchanging of the 
products as we pay one another for producing them. 

What excuse is there for such traffic? None 
whatever. It is carried on because " money seeks 
investment." 

But does not wholesale manufacture necessitate 
such traffic and such unnatural grouping of the pro- 
ducers ? Yes. But is wholesale manufacture neces- 
sary? Does it promote the welfare of the people? 
The clamor for work and wages, the periodical stag- 
nations of business, and the impoverishment of the 



THE HIRING OF MONEY. 27 

masses prove the contrary. For thousands of years 
the people have produced all they needed (even 
more than they needed) without the help of steam 
engines. They are as capable now. 

Still, the more we produce the better we ought 
to be supplied; the faster we produce, the more 
time ought to be left us for recreation and enjoy- 
ment. If machines enable us to produce twice as 
fast, they ought to reduce the hours of toil fifty per 
cent. 

But experience has taught us, that the more we 
produce the less the producers have to enjoy ; the 
faster they produce, the more steadily they must 
toil to get a living. What accounts for such unnat- 
ural results ? 

"Money invested.'* The investments swallow 
up more than is gained by using the machines. The 
raw material is shipped to the manufacturing place; 
the ready-made articles are sent back to where they 
are wanted. The dealers who attend to the shipping 
and re-shipping, as well as the transfer companies, 
have money invested ; the machines, the build- 
ings, the steam plants, the stock, each and all is an 
investment. 

If all the expenses, including investment inter- 
est, were added to the prices of the articles manu- 
factured in an open way, the price of the machine- 
made article would be higher than that of the hand- 
made. But this, machine producers dare not do be- 
cause hand-made articles are generally preferred. 
So the matter is doctored up or adjusted by means 
of forgeries, adulterations and miserable workman- 
ship. This brings about the ''cheap, but poor." If 



28 THE SOLUTION OF THE SOCIAL PROBLEM. 

a machine-made article is sold ten per cent, cheaper 
than a hand-made, it is one hundred per cent, poorer, 
for all that investment interest has to come out of 
the consumer's pocket in some way. 

But this is not all. Wholesale manufacture de- 
faces and defiles even God's creations. It disfigures 
the bank of the river and pollutes its water ; it 
blackens and poisons the air ; it exhausts the mine ; 
it annihilates the forest; it impairs health, maims 
limbs and destroys lives. And all this, just because 
"money seeks investment." 

Who or what is responsible for that corruption 
of business? Rings? Monopolies? Corporations? 
Party legislation ? Not any of these. Although 
these are sores on the body politic, they are but 
effects ; they are not original causes. Those rings 
so much complained of are simply " investors," who 
cling together for the purpose of securing a good 
interest on their investments — something that every 
laboring man would do if he had the chance or 
means. 

The investor pockets the booty, but he is 
passive. He simply waits for the sheep to come to 
be shorn. It is through our own mismanagement, 
through our patronizing him, that he becomes our 
tormentor. We pass the door of the mechanic to 
get our supply from some dealer. Why? To get it 
cheap. What is "cheap?" Does adding to the 
price without increasingthe value make thingscheap? 
Is it because they get things cheap that so many of 
the laboring men are at the brink of starvation ? 

Traffic produces nothing, money produces 
nothing. Every cent meddlers make has to come 



THE HIRING OF MONEY. 29 

out of labor. If the dealer actually could sell 
articles for less money than the mechanic can make 
them for, it would only prove that the producers of 
the articles have been robbed. 

If we had never patronized meddlers, neither 
pernicious traffic nor wholesale manufacture could 
have become possible ; none of your cliques or 
rings could have come into existence ; those pitiful 
slaves, the factory hands, would today be independ- 
ent mechanics, and the millions now pocketed by 
meddlers would still remain with the producers. 

But now the producer has become a mere tool 
in the hands of the investor, and as befitting this 
circumstance, producing has lost even the significa- 
tion of " business." The meddler has assumed that 
predicate. The mechanic has betrayed his trade, 
surrendered the last remnant of his economic inde- 
pendence and made a slave of himself. And after 
all this bitter experience, we patronize meddlers 
more than ever. How can this be accounted for? 

I do not mean to say that labor-saving machines 
rhould not be used under any circumstances. After 
the system of robbery, called investing money shall 
have been rendered impracticable (which we shall 
see further on can be easily done), a new order of 
things will step in, and machines, as far as they will 
be practicable under the new order, will become as 
much of a benefit to the human family as some of 
them now prove to be a detriment. 

We believe that we are ever so much wiser than 
people of former days, but our management of 
business is no proof of it. The fact is, we suffer in 
consequence of ignorance. The individual strives 



3 o THE SOLUTION OF THE SOCIAL PROBLEM. 

to improve his lot, and it is our common interest to 
ameliorate our condition as a whole. Hence, any- 
thing that deteriorates the condition of the masses, 
but is nevertheless used and commonly patronized, 
exposes general ignorance, and that, too, if it did 
require skill to bring it about. 

The horse is a powerful animal. If he were not 
ignorant of the fact, he could not be tamed, could 
not be compelled to do hard work. The wronged 
and suffering masses constitute a powerful majority 
of the body politic. They may be aware of the 
fact, but why do they not improve their condition? 
Because they do not know how. They suffer be- 
cause they are ignorant of the de facto situation. 

So long as the laboring men, who produce the 
necessaries of life, create all wealth and constitute 
a powerful majority with any people, suffer want, 
while nature yields abundantly, they have no claim 
to intelligence. Does that seem harsh? It is the 
truth, and "The truth will make you free." No one 
can make you free but you yourselves; and you 
cannot acquire freedom without knowing the bare 
facts in the case, be they what they will. So long 
as prejudice and self conceit prevent you from 
learning the facts, you will remain slaves. 

The economic evil does not rest with the 
investors any more than with their victims. The 
corruption of business, as well as the fallacy of 
investing money, gives evidence of some mental 
defect which is common to all of us. That defect 
cannot be mere ignorance, much less stupidity or 
imbecility, because there is system in the corrup- 
tion. What can it be? 



III. OUR MENTAL CONDITION. 



The chapter I now begin will, I fear, hurt the 
reader's feelings. I should much rather avoid this, 
but in order to remove the economic evil we must 
know the bare facts. Intelligence, we believe, has 
reached the top of the ladder, but our management 
of political economy is no proof of it. All peoples, 
at all times have had the same opinion of them- 
selves. 

Self conceit is a great obstacle in the way of 
study. He who thinks he knows it all no longer 
recognizes the need of study ; and the worst of it 
is that he who knows the least, feels surest that he 
knows it all. 

I have several times pointed out the fact 
that our actions expose lack of judgment ; and the 
reader will have noticed that we always meet that 
mental defect in connection with money. When 
we glance at science and see its work, that it makes 
natural forces subservient to the will of men ; when 
we consider the extent to which it has watched and 
explained the movements of the heavenly bodies ; 
when we examine the inventions of the last cen- 
tury, etc., we must admit that the human mind is 
clear and penetrating. 



32 THE SOLUTION OF THE SOCIAL PROBLEM. 

But when we study the political and economic 
fields and see people suffering want in the midst of 
abundance of everything ; when we find that the 
very ones who produce the abundance are the poor, 
the sufferers, and have to confess ourselves unable 
to see the cause of it or devise a practical remedy, 
we cannot help admitting, to the contrary, that the 
mind is very dull. 

Now mark the difference. Science operates 
independent of money, but political economy is 
interwoven with money from beginning to end. 
This shows that mental debility is not a fault com- 
mitted or a defect left by nature, for it is limited to 
money. Misconceptions, corrupt ideas respecting 
money, which have been inherited from generation 
to generation, have taken possession of the mind. 
They interfere with the brain in the exercise of 
its functions. Hence the fact, that, independent 
of money, we accomplish almost everything — so 
far the mind is free ; but, with or against money, 
we accomplish nothing, because so far the mind is 
encumbered. 

This, perhaps, will be news to you, and your 
pride will rebel against such an idea. But keep 
cool, please, and try your mental strength with 
some direct money questions. 

What is the difference between gold, money, 
and dollar? Is the medium of exchange a public 
institution, or private property? If a public insti- 
tution, what right has the individual to hire it out 
and put the spoils or interest in his own pocket? If 
private property, what right has the lawmaker to 
meddle with it ? What causes the rise and fall of 
money value ? 



THE HIRING OF MONEY. 33 

When, at the close of the civil war, the legisla- 
ture of Illinois made ten per cent, a legal interest 
(six per cent, was the rate before), A and B, as I 
will now call them, got into a controversy about 
that act. A called it a robbery on the poorer or 
middle classes, while B contended it was the best 
act that honorable body had passed. In defense of 
his views he said : 

" Money, like other commodities, is cheap 
when it is plenty, and its value rises when it gets 
scarce. A scarcity of money in our state has been 
felt for some time ; consequently it has gone up. 
We can no longer get it as cheap as we used to. In 
the eastern states money is plenty, and hence 
cheap. It can be had at five per cent., while further 
west fifteen to twenty per cent, is paid for it. The 
lawmaker has confronted a necessity. The higher 
interest will draw money from the east, while under 
the old conditions, even the money we have in the 
state now would go further west, where higher 
interest is paid for it. This would have made hard 
times for us. Times are always hard when money 
is scarce." 

Let us now observe cause and effect in this 
matter. At that time a minister of the gospel 
occupied a house which he rented from a member 
of his flock at the legal interest on its value. The 
house had been bought for eight hundred dollars, 
and, as interest was then six per cent., the minis- 
ter's house rent amounted to forty-eight dollars 
annually. 

Since interest makes the price, the nigher inter- 
est affected rents and prices in general, but, under 



34 THE SOLUTION OF THE SOCIAL PROBLEM. 

the existing contract, it affected the minister's rent 
more directly. The landlord stuck to the contract. 
"An investment must bring its interest," said he, 
" and, since there is wear and tear and taxes to be 
paid, renting the house at the bare interest is 
cheaper than even a minister ought to expect." 
Thus, the additional four per cent, interest raised 
the minister's rent from forty-eight dollars to eighty 
dollars. 

The rate of interest had been raised because 
" money went up," but it looked now more as if 
money had gone down, for it required more of it to 
procure the same commodities — a fact to which the 
minister can testify. Interest had been raised to 
prevent hard times, but it looked rather as if harder 
times had been forced on the public, for, while it 
raised prices and, consequently, expenses, it did 
not raise wages. What are the facts in the case? 

Let us, for an illustration, assume that six per 
cent, is the cardinal interest, and that under that 
rate one dollar is worth one dollar even. Then if 
money should go up, say ten per cent., one hundred 
dollars hired would become worth one hundred and 
ten dollars, and the six dollars paid for interest 
six dollars and sixty cents. Thus, if all money 
should go up alike, the rise of the interest money 
would always pay the corresponding interest on 
the rise of the money hired, and changing the rate 
of interest would never become necessary. But 
why is it that when money goes up interest money 
does not go up also? 

Everything works naturally. Money is a thing 
of our own make, and there is nothing supernatural 



THE HIRING OF MONEY. 35 

in it. Since it has been in use for two thousand 
years, it ought to be understood by this time. Ev- 
erybody ought to be able to answer any and all 
money questions. If you cannot explain them, you 
will have to admit that with money your under- 
standing is paralyzed. 

Another proof of this fact is the belief in 

MONEY POWER. 

There are powers which are unexplainable, 
electricity, for instance, but the existence of 
such powers can always be proven. If I were to 
prove the power of electricity, I should have the 
inquirer touch a live wire. He would soon be con- 
vinced of the existence of that power. But I defy 
anybody to prove power of money. 

" Well," said a critic, "it seems you have never 
noticed the power of money in business, legislation, 
jurisdiction — everywhere. You don't know that 
petty thieves are imprisoned, while those who steal 
millions run at large. If I were a rich man, I could 
soon convince you of that power ; but as it is, I 
can't do it. But if you will keep your eyes open 
you will see that power every day. Is not the rich 
man preferred in society? Just look at John B. 
He is rude and silly, but is he not received with 
courtesy wherever he goes ? Does not everybody 
meet him with an extended hand and a ' How do 
you do, Mr. B.? ' Now, if it is not his money and 
his farms that cause this, what is it? Why, if he 
were poor nobody would look at him "' 

I have no doubt you could cite many such in- 



36 THE SOLUTION OF THE SOCIAL PROBLEM. 

stances, but they do not prove the power of money. 
Whenever a cause is removed, the effects cease. If 
such demonstrations were effects, or power of 
money, they would cease when the money, the 
cause, is removed. But take the poorest man out 
of the poorhouse, dress him in good clothes and 
introduce him as the railroad king, Vanderbilt, and 
you will observe the same "How do you do" and 
the same extended hand, although the man may 
not have a cent of money. On the other hand, 
introduce the genuine Vanderbilt as a poor but 
honest man who needs a little pecuniary assistance, 
and the same individuals will turn their backs on 
him. His money will not be of the slightest effect. 
Since such abject demonstrations will appear and 
fail to appear contrary to the presence or absence 
of money, they are simply effusions of a sick brain. 

"This shows the very thing — that it is not the 
man the people bow to, but the money. They 
don't know but the money is there. Hence the 
demonstration." 

This is saying that the cause need not exist ; it 
will be of effect if you only believe it to exist. This 
is too absurd for me to waste words over it. 

" How do you account for the existence of rail- 
roads, tunnels and the like great constructions? 
Since such enterprises cannot be accomplished 
without money, the power to execute them is cer- 
tainly in the money." 

In this case, you mistake a system of robbery 
for power of money. Money is required to build 
such things, but that money represents performed 
labor, labor of which the laborers have been 



THE HIRING OF MONEY. 37 

deprived and which others have accumulated and 
stored up in the form of money. In building a rail- 
road, for instance, pre-performed labor is exchanged 
for labor to be performed. Labor creates the 
means, labor builds the railroad, consequently all 
credit is due to labor, brain and brawn. The capi- 
talist does not even deserve the credit of a thief, 
because he does not do the stealing himself. Our 
economic system steals for him. 

" Suppose the government issues a hundred 
million dollars of paper money for the purpose of 
building a railroad. Will that money represent 
pre-performed labor? And will the railroad come 
into existence through a system of robbery, or 
through the power of that money ?" 

It will come into existence through the power 
of the government. We, the people, are the gov- 
ernment, and we, the people, are able to build a 
railroad without stolen labor. In this case, the road 
is built on public credit and is then public property 
— the only proper way to build one. But with rail- 
roads built by individuals, a system of robbery is 
the source of the means. Whether built by the 
government or by individuals, the money does not 
perform any part of the labor ; it is only needed to 
exchange labor. (The particulars of this will be 
found further on in this book.) The idea that money 
can build railroads, or exercise any power what- 
ever, is simply ridiculous. The mere fact that 
money is inanimate, ought to be sufficient proof for 
any rational being that money power is a phantom. 
" I do not claim that money by itself can exer- 
cise power, but in the hands of men, money is a 



38 THE SOLUTION OF THE SOCIAL PROBLEM. 

powerful instrument. The rich control everything, 
and they exercise their control through money." 

How do they use that "powerful" instrument? 
The only use that can be made of money is that of 
a medium of exchange ; the only misuse to hire it. 
Neither the use nor the misuse affects anybody 
except the respective parties in a transaction, and 
no power is thereby exercised, because each party 
exercises free will. Money does not become a 
power until it is invested, and since the investment 
is a deception, money power begins just where 
common sense ends. 

A ragman who died in a Paris poorhouse left 
over fifty thousand francs in money and bank stock 
in his trunk. I have known a millionaire (Thorn- 
ton, St. Louis), a bachelor who spent the best part 
of his life in a one-window back room in one of his 
numerous houses; wore shabby clothes, sponged his 
living as far as possible, and at one time attempted 
suicide because he had lost a few hundred dollars 
through poor speculation. Does this look as if 
money were a powerful instrument in the hands of 
the man ? Does it not look more as if the man 
were a plaything in the hands of money ? You will 
say, these are exceptional cases. Only the degree 
or intensity is an exception. As a rule, few of the 
rich enjoy the ease and comfort riches afford. Al- 
though they possess more than they can ever use, 
they exert themselves continually, even resort to 
foul means, to get more. However, they never 
reach their object. The object moves further away 
faster than they draw near. Their efforts are not 
only vain, but vile and stupid. 



1HE HIRING OF MONEY. 39 

Four or five thousand years ago Israelites made 
a calf of gold ; now gold makes calves of us. 

Perhaps my critic will now comprehend that 
the cause of the corruption he sees everywhere is 
not power of money but mental incumbrance. 

As said before, money power is a phantom. 
By "phantom "I do not mean an apparition, but 
mental aberration. Whenever misconceptions be- 
come fixed in the mind they become premises, 
standpoints to reason from. Consequently, we can 
no longer reason correctly on the respective sub- 
jects. Believing something that does not exist 
creates a bare phantom ; believing some existing 
thing to be what it is not creates a concrete phan- 
tom. Ghosts and witches were bare phantoms ; 
money power is a concrete one. This renders it 
more formidable and mysterious ; it cannot be 
detected as easily as a bare phantom, because its 
concrete (money) hides it. 

If witchcraft had been concrete, with feathers, 
for instance, with all the mischief that phantom has 
done, the observer would only have seen the 
feathers, for phantoms are invisible ; he would have 
accredited the effects of the phantom to the feath- 
ers and probably called it feather power. So in 
our case. With all the corruption this phantom 
brings about, the observer sees only the money, 
attributes the effect of the phantom to the money 
and calls it money power. 

Ghosts and witches have brought fright and 
terror to the people. Money power has demoral- 
ized mankind. It has kept and still keeps the ma- 



40 THE SOLUTION OF THE SOCIAL PROBLEM. 

jority of the people in poverty and misery ; it has 
driven millions to despair and suicide. 

When the Germans found out what ghosts are, 
the ghosts disappeared. When the Puritans found 
out what witches are, the witches ceased to exist. 
Let us find out what money is, and money power 
and capital, like ghosts and witches, will be things 
of the past. 



IV. MONEY. 



The historian is older than the pen, and we 
have records of important happenings of thousands 
of years ago. It seems, therefore, somewhat strange 
that we do not have a separate history of money. 
The question when, where and by whom was money 
established, is still an open one with most people. 

We would suppose that establishing a world- 
wide institution, like the medium of exchange, 
wherein every nation, nay, every individual, is 
directly interested, would have required proposi- 
tions, plans ; that it would have necessitated na- 
tional and international conventions, final ratifica- 
tions and the like. But of such history knows 
naught. This proves that a formal establishment 
never took place. 

"Money" is from Moneta, a surname of the 
Greek idol, Juno; "dollar" is from the German 
thai (dale), particularly St. Joachim's thai, a valley 
in the silver regions of Bohemia. These words 
were originally adjectives used with "coin," as 
Moneta coin, St. Joachim's thaler coin. The latter, 
being too long for convenience, was abbreviated to 
"Thaler," dollar. When finally the noun (coin) 
was dropped, the adjectives became arbitrary 
names. Hence these words disclose nothing save 
that coin is older than these names. 



41 



42 THE SOL UTION OF THE SOCIAL PROBLEM. 

The Bible, mentioning money the first time 
(Gen. XXIII, 16), does not present it as something 
new, but as current with the merchants. Passages 
like Gen. XLII, 35, Exod. XXII, 17, seem likewise 
to show thai: money was a common thing in Moses' 
time. Exod. XXI, 21, shows that even the delusion 
of investing money existed. A delusion is younger 
than its parent. Since Moses calls a man's slaves 
his money, as if it were a self evident fact, we must 
suppose that the delusion was common, and that 
consequently money must have existed a long time. 
Exod. XXII, 25, Levit. XXV, 37, and Deut. XXIII, 
19, are prohibitions of usury. Usury is misuse of 
the medium of exchange. Public institutions are 
not established for misuse , the misuse creeps in 
afterwards and gradually. Since usury was prac- 
ticed to such an extent as to cause Moses to forbid 
it, we must again suppose that money is much 
older than Moses. Judging from the Bible, we 
might suppose that God himself created the me- 
dium of exchange along with the world. This, 
though, is not at all likely, for He would not have 
made it a puzzle. 

Since savage tribes do not have money, civilization 
is certainly the mother of it. Searching for its birth, 
let us begin with a time when no such thing as civ- 
ilization existed, follow up the natural course of 
development, and see whether we shall discover the 
event. 

Prior to the mutual mode of producing, we 
find tribes of people scattered over the country, 
living in huts or caves, or simply in the woods. 
Free gifts of nature constitute the main part of 



7 HE HIRING OF MONEY. 43 

their few necessities of life, and since there is no 
capital to be fed, the work they have to do is very 
little. 

Still, the fish will not come out of the water of 
their own accord; game must be caught, dressed, 
and perhaps cooked ; the hides must be tanned and 
converted into clothing or covering, etc. To 
accomplish this the savages have need of some 
tools and utensils, and these must be produced. 

Since nature qualifies men differently, one 
makes a good bow and arrow, but is not able to 
make a good net; one makes a cutting instrument, 
but cannot produce a cooking vessel, etc. This 
leads to propositions like these : You make my 
tomahawk, and I will tan your hides. I will make 
your moccasins if you will make my canoe, etc. 
The propositions are accepted, and with this, mutual 
production takes its beginning. 

This is the dawn of civilization. 

Skipping a long space of time, we find mutual 
production established. Tools have been improved 
and new ones invented, and a large variety of 
articles are produced ; the producer has become a 
mechanic, and is dependent on his trade for his liv- 
ing, consequently exchanging products has become 
inevitable. This causes difficulties. The chance to 
get what a man wants in exchange for the article or 
articles he produces himself will not always present 
itself; and when it does, one of the parties often 
has to sacrifice a part of his product to effect the 
necessary exchange. This condition of things calls 
for a means or medium to facilitate the exchange. 

Uncivilized and half-civilized peoples are fond 



44 THE SOLUTION OF THE SOCIAL PROBLEM. 

of tinsel. Gold is the first metal found (this is an 
historical fact), and its luster is captivating. This is 
made use of. By offering a piece of gold for it, the 
desired article is obtained ; by adding a piece of the 
shining metal to the article of less consideration or 
value the exchange is effected. Through this gold 
becomes their select article, that is, the article by 
the help of which other articles are exchanged- 

With the select article we have arrived at an 
historical time ; therefore we will drop the hypo- 
thetical discourse, and see what we can gather from 
history. 

As to the original population of the globe, our 
knowledge is dependent on revelation. Historic- 
ally, it is known that wandering tribes have found 
one another who did not before know of one an- 
other's existence ; and they have found one another 
in a higher or lower state of civilization. Hence, it 
cannot be supposed that civilization took its begin- 
ning with a single tribe of people and in a single 
locality. But, no matter with how many tribes civ- 
ilization may have taken a beginning, all had to go 
through a course similar to that described in our 
hypothesis ; all had to resort to a select article. 

The requirements of a select article are demand, 
divisibility and durability. It must be in demand, 
that anyone will accept it; it must be divisible, or 
exist in different sizes, that any value difference can 
be balanced ; it must be preservable, that people 
will accept it even when they have no immediate 
use for it. The article which best answered these 
requirements with a nation became the select 
article of the nation. Thus, tea, salt, codfish, sea- 



THE HIRING OF MONEY. 45 

shells, furs and a number of other things have at 
different times and with different nations served as 
the select article. 

All agricultural and pastoral tribes have ex- 
changed through animals. Since agriculture and 
herding is and has been carried on in all inhabitable 
parts of the globe, animals became that select article 
which had the widest "circulation" and which 
served for the longest space of time. Since animals 
must be fed and otherwise attended to, having to 
keep them on hand for exchange purposes was cer- 
tainly very inconvenient to anyone but a herder 
or a farmer. But think of the burden of having 
to take along a herd of animals on a trading tour ! 

It was the trader who first sought for a more 
convenient medium of exchange. The old Phoe- 
nicians are accredited with having made the first 
move in that direction. They conceived the idea 
that things can be exchanged by means of repre- 
sentation. They made tokens of bronze, each of 
which bore the picture of the animal it was to repre- 
sent. Provided with such, tokens, the trader could 
now make his tour unhampered by animals, trade as 
far as his credit was good, and then ship the ani- 
mals, just the kind and number traded for, by the 
most direct route. 

Those tokens were called pecunia, which, ren- 
dered into English, is animal token. "Pecunia" is 
from pecus, cattle. Since the select article included 
all kinds of animals, pecus acquired also the sense 
of "animals"; and since wealth consisted of and 
was expressed in cattle or animals, pecus became 



46 THE SOLUTION OF THE SOCIAL PROBLEM. 

also synonymous with property, wealth, in which 
sense, though, it took the form of pecitlium. 

With other nations and tongues the equivalents 
of pecus, cattle, as fe, fio, fie and other variations of 
the word, became synonymous with "wealth." 
Those names were afterwards confounded with 
" money," and thus gave us our "fee," "peculation," 
" pecuniary" and similar words. 

The pecunia was an artificial medium of ex- 
change with a select article as its basis. If the state 
had taken the matter in hand, issued the tokens on 
public credit and as direct representatives of value, 
the artificial medium of exchange would have been 
established. But the idea of such a medium had 
not yet matured, and the pecunia died as a private 
concern. 

But it taught the people that metal is more easily 
kept and transported than animals, which brought 
about the bronze period. The Greeks made bronze 
pieces of different forms and sizes to make them 
equivalent to d fferent animals. Some of these 
pieces, which have been excavated, weigh four to 
five pounds. Some bear the picture of an animal, 
others are destitute of any mark of designation. It 
is supposed that the latter are of a later date — made 
after the people had learned to express value in 
bronze without the aid of pictures. The* Persians, 
who had two select articles, animals and dates, 
made " dates " of bronze, and used them exclu- 
sively. 

Evidently those bronze pieces were considered 
an improvement on the pecunia, because the ani- 
mals did not have to follow. But, in fact, it was a 



THE HIRING OF MONEY. 47 

retrogressive step, because the idea of exchanging 
by representation, which had been approached so 
near by the Phoenicians, was lost. They only had 
changed the select article from animals to bronze. 

When that change was made, the values of 
things, which so far had been expressed in animals, 
had to be judged or computed in bronze. This was 
left to the people. Only the fines, which in the 
Roman mulda (codex) ranged from one sheep to 
thirty head of cattle, were computed by men of the 
law. The old Latin for bronze is aes, and that valu- 
ation was called aes-timatio," which, by the way, 
is the root of our " estimation." 

In no case has the select article been a formally 
established medium of exchange ; some commodity 
became that medium by its own strength or merits. 
Giving or receiving a select article for some other 
article was not different from exchanging things, 
neither of which was a select article. There was 
nothing in the select article which could have been 
of interest to the historian, consequently we have 
no history of the medium of exchange. Ancient 
writers mention the select article only perchance 
and unaware of the fact that such mention could be 
of interest to future generations. Homer, for in- 
stance, who lived about nine hundred years before 
Christ, narrates in his Iliad that a three-legged ves- 
sel, which the Dana people judged worth twelve 
head of cattle, and a blooming and adroit maiden, 
who was worth four head of cattle, were put up for 
a prize. 

Usury has always been the curse of civilization, 
but to that curse we are indebted for some histor- 



48 THE SOLUTION OF THE SOCIAL PROBLEM. 

ical information respecting the medium of exchange. 
Licurgus, who lived eight hundred or seven hundred 
years B. C, trying to check usury, forbade the use 
of gold and silver for exchange purposes, and or- 
dered iron to be used instead. Plato, 430 B. C, 
taught that, to kill usury, the people need a medium 
of exchange that has no value. Aristotle, 384 B.C., 
declared that the medium of exchange is only a 
creature of law. 

We deduce from the above, that in Licurgus' time 
gold and silver was used for a medium of exchange, 
and that legislators began to consider that medium; 
that Plato made the first move toward an artificial 
medium, for, " the people need a medium of ex- 
change that has no value," is equal to saying, the 
people need an artificial medium; and that in Aris- 
totle's time the artificial medium existed, for the 
select article, which in all cases has been a product 
of nature and independent of law, could not have 
been mistaken for a creature of law. 

But circumstances do not corroborate the sup- 
position. About 451 B. C., Tertullion caused the 
" twelve tables" to be written, which tables con- 
tained the first written law of the Romans. About 
268 B. C, the first silver was coined in Rome. 
While written law existed— at least with the Romans 
— coin did not exist until a century after Aristotle's 
time. Since the artificial medium cannot exist 
without legally issued coin or some token based on 
public credit, it is hard to see what sort of a medium 
Aristotle called "a creature of law." If, however, 
such a medium existed, it can only have been an 
imperfect one. And it has not been perfected up 



THE HIRING OF MONEY. 



49 



to this day, as we shall see further on in this 
chapter. 

When we now take into consideration that 
David, who lived in or before Homer's time, gave 
six hundred shekels of gold for a place to build an 
altar (i Chr. XXI, 25), and that Abraham, who 
lived long before Horner's time, gave four hundred 
shekels of silver for a burying place (Gen. XXIII, 
15, 16), we see that gold and silver were used for 
exchange purposes long before the bronze period, 
and even before the animal time. This shows that 
as regards select articles there has been no such 
thing as order of succession. Among different 
nations different things have been used in the same 
time. While some nations have changed from one 
thing to another, others have perhaps used gold 
and silver from the first. 

It, is, therefore, not at all improbable that our 
hypothesis is a statement of facts, true for some 
tribe or tribes who lived where gold was found. 

Since both the select article and the artificial 
medium are intervening agencies, both serving the 
same purpose, both are mediums of exchange. 
Nevertheless, there is an essential difference be- 
tween the two. 



The select article has 
been in all cases a product 
of nature, and private prop- 
erty. 

Exchanging for or against 
a select article is not differ- 
ent from exchanging things 
neither of which is a select 
article. 



The artificial medium is 
a public institution. 

The tokens, which we call 
money, represent the con- 
sideration in the exchange. 
Hence the exchange is arti- 
ficial and complicated; a 
sale and a purchase consti- 
tute one exchange. 



5 o THE SOLUTION OF THE SOCIAL PROBLEM. 



It is an equivalent to a 
larger or smaller amount, 
according to size or weight 
and quality. 

Legislation has no more 
to do with it than with other 
private property. Anyone 
can raise or produce of it as 
much as he pleases and 
"put it in circulation;" ac- 
cept it or reject it, and han- 
dle it as he pleases. 

Its value is established by 
the markets; it affects the 
exchanges on its own 
strength or value. 



Since the tokens are but 
representatives, the size, 
weight and quality of them 
are immaterial. 

It is a creature of law. 
The tokens are issued by 
state authority and in pur- 
suance of law ; law sets the 
amount each token is to 
represent; law protects 
them against disfigurement 
and forbids private issues 
and counterfeiting; law 
makes them a legal tender 
for debt ; hence law is their 
strength in the exchanges. 



Comparing the existing medium with the above 
analysis, we find that it is neither the select article 
nor the artificial medium, but that in part it corre- 
sponds to both. This shows that we still stand in 
the Phoenicians' shoes. The artificial medium ex- 
ists now in law and in fact, but still has the select 
article basis. The medium is androgynous, which 
renders it unintelligible and mysterious. The select 
article is a natural medium and does not admit of 
legislation ; it becomes artificial as soon and as far 
as the law-maker meddles with it. 

Anything instituted through law is artificial. 
The law-maker has established the artificial medium 
without realizing it, and, as his mind is encumbered, 
has made a fizzle of it. The select article is, the 
artificial medium represents the consideration in the 
exchange. By saying "twenty-three and eight- 
tenths grains of gold shall constitute (instead of 
represent) one dollar," the law presents the tokens 



THE HIRING OF MONEY. 51 

(which go with the artificial medium and without 
which that medium cannot become operative) as 
select articles — the very thing the same law abol- 
ishes. 

Again, while the law presents the tokens as 
private property, it stamps them as visible marks of 
a public institution. Look at any one of them, and 
it tells you, "Render, therefore, unto Caesar the 
things that are Caesar's." If these tokens are pri- 
vate property, every one of them bears a lie on its 
face. 

If the law-maker had known what he was about, 
and established the artificial medium of exchange 
in proper and intelligible form, the people would 
have seen from the start that the artificial medium 
is but an instrument, the tokens only transfer tick- 
ets ; the medium could not have become a puzzle, 
and chimeras like money power and capital could 
not have originated. 

The name, money, is of Roman origin, about 
two thousand years old, and a child of superstition. 

The name of the most exalted idol of Greeks 
and Romans was Moneta Juno. "Moneta" is from 
monere, to warn, advise ; "Juno" from juvando, to 
help, and the idol of that name was to the Romans 
the embodiment of advice and help ; she was the 
queen of the gods, and had a number of human af- 
fairs in her special care. Of these only one is of 
interest here : She was the patroness (creator and 
preserver) of kingdoms and riches. 

Usury is as old as the select article. Not know- 
ing that usury is that creator and preserver, but 
seeing that the medium of exchange is in some way 



52 THE SOLUTION OF THE SOCIAL PROBLEM. 

connected with it, the Romans mistook the effects 
of usury for the power of the idol Moneta; they 
believed that the idol, as that patroness, operated 
through the medium of exchange. In consequence 
of this they manufactured coins in her temple, con- 
secrated them to the idol, and named them after 
her, moneta. This is the root of the name, money. 

Capital is of rather recent origin ; banking cre- 
ated it ; but money power, i. e. } moneta-power, 
dates back to the time of the ancient Romans. 

The ancient Hebrews knew nothing of that 
idol, and their language has no equivalent for 
"money." The translators of the Bible have ren- 
dered the words ketem, keseph (gold, silver) where 
they appear as select article, " money." This ac- 
counts for the appearance of " money" in the Old 
Testament. 



V. VALUE. 



Since we exchange our products by it, every 
producer ought to know precisely what value is, for, 
without knowing it, he has no means of knowing 
whether an exchange is equitable or inequitable. 
Ask the question, and you will get the answer: 
"The value of an article is whatever the article will 
fetch in the market." This is an evasive answer. 
What is value by itself, independent of markets? 
This is what the producer must know before he is 
able to hold his own. 

The word value is from the Latin valerc y to be 
strong. We speak of intrinsic value and of nom- 
inal value. "Intrinsic" means inward, inherent. 
The intrinsic value of an article is its property or 
properties which render the thing useful ; literally, 
its "strength" in ministering to our wants; it is 
synonymous with usefulness, utility. The intrinsic 
value of a thing is always the same ; that is, demand 
and locality do not affect it. A loaf of bread min- 
isters to the same want, satisfies hunger, no matter 
where it is eaten or what the price of it may be- 
Intrinsic value cannot be expressed in figures or 
measured quantums, because we have no standard 
of intrinsic value. It is not the value we exchange 
our products by. 

Nominal value is, as the prefix says, nominal ; 

53 



54 THE SOLUTION OF THE SOCIAL PROBLEM. 

that is, it exists only in name. Literally, the nom- 
inal value of a thing is its power in the exchange, 
its power to obtain. That power or value is what- 
ever seller and buyer make it. The seller sets his 
price. He is at liberty to demand any price, and 
the buyer is free to offer any price. The sum seller 
and buyer finally agree upon is then the nominal 
value of the article sold and bought. Many and 
repeated bargains establish a medium or general 
price of the respective articles which is then called 
market price, market value. In order to get a nom- 
inal value, the article must have an intrinsic 
value, because the intrinsic value of the article is 
the buyer's object. This brings the nominal value 
of articles to correspond somewhat with the intrin- 
sic. But there are exceptions. With one excep- 
tion, the intrinsic value of so-called precious stones 
is but that of common stones of the same size ; but 
a big price is generally paid for them. On the 
other hand a horse may have great intrinsic value, 
but if there is no market for him, if nobody wants 
to buy a horse, he cannot command a nominal value. 
In this case the horse is 'to be strong," but fails to 
be. Since the exchange itself establishes the nom- 
inal values, independent of exchange nominal value 
is simply nothing. What difference is it to you 
whether a bushel of potatoes which you have raised 
yourself and which you consume yourself is worth 
five dollars or five cents? 

Since nominal value is not self-existing, it is 
not and cannot be a basis of exchange, because 
the " as much" cannot be determined by it. And 
yet this is the value we exchange our products by. 



THE HIRING OF 3I0NE Y. 55 

Exchanging by value is exchanging by nothing, 
blindly. This is the fundamental cause of the econ- 
omic evil. 

Both intrinsic and nominal values are naturally 
independent of law. Hence, all attempts on the 
part of the legislator to fix or regulate prices of cer- 
tain commodities have proven failures. Neverthe- 
less, the law-maker has set the price of gold, and 
for that reason I speak of the value of that metal 
separately. Since there is no standard for it, in- 
trinsic value can only be told through comparison. 
The different and many uses iron is put to need not 
be enumerated. Gold cannot take the place of 
iron, because it is too soft. Tools made of gold 
would not cut; cooking-vessels would melt; rails 
would flatten under the pressure of an engine, etc. 
True, gold has rare properties : it is malleable, it has 
a pleasing luster, and is not corrosive — just the 
thing for jewelry and dentistry. But the amount 
needed for filling teeth is too small to cut a figure 
as regards demand, and jewelry does not minister 
to our wants. It may satisfy vanity, but never actual 
want. If the Creator would take the iron out of ex- 
istence we should be sorely afflicted ; indeed, it 
would reduce our mode of living almost to that of 
the savage. 

But if He would take away the gold we should 
hardly miss it ; the majority of the people would 
not even notice it; everything would go on as be- 
fore. This shows that the intrinsic value of gold is 
very small— much smaller than that of iron. 

At present it is not known what the nominal 
value of gold would be, because the law sets its 



56 THE SOLUTION OF THE SOCIAL PROBLEM. 

price — twenty-three and eight-tenths grains of 
coined gold is one dollar by law. The difference 
in price between coin and bullion is the expense of 
coining it, and for that expense we have the metal 
a legal tender. Unless gold is demonetized, unless 
that law is repealed and the mind is cleared of its 
encumbrance, a nominal value of that metal cannot 
be established. 

It will seem perhaps, to the reader, that there 
is a power in gold besides that of law, for he feels 
sure that if the law were stricken from the statutes 
the people would accept gold at the fixed price just 
as readily. 

Yes, there is something of that sort connected 
with this metal, namely, mental aberration. Gold 
is our idol. That the people would accept gold at 
the fixed price, or perhaps even at a still higher 
price, shows only that the phantom, money power, 
is stronger than law. The wholesale swindles com- 
mitted by rich men are another proof of this fact. 

When we consider that the intrinsic value of 
gold is less than that of iron, and that at the same 
time it has properties which make it captivating; 
that it is something the human family could easily 
get along without, but that nevertheless everybody 
will accept it for what he has to spare, we might 
judge that the Lord made it for the very purpose of 
a medium of exchange. But for the phantom con- 
nected with it I would favor the continuance of that 
use of it. But the mind would regain its equilib- 
rium much more quickly if that deceiving metal 
were demonetized. 



THE HIRING OF MONEY. 57 

OUR SYSTEM OF EXCHANGE. 

Exchanging of products is the chief part of 
political economy ; in fact, it is the political econ- 
omy. The contents of all the voluminous books 
written on this subject may be concentrated into 
the one idea, exchanging of products. If we could 
and would return to independent production, so 
that no products were to be exchanged, all transac- 
tions coming under the head of political economy 
would cease. 

Under independent production no economic 
evil can arise, simply because the product does not 
go out of the producer's hands. Neither can such 
an evil arise under mutual production so long as we 
exchange the products equitably. So long as we 
receive as much product as we give product, and 
vice versa, we exchange only the form of the prod- 
uct; the amount remains with the producer, be- 
cause he receives the same amount he gives. Since 
no economic evil can arise under equitable ex- 
change, the present evil is a result of inequitable 
exchange. 

Products are exchanged either immediately, 
that is, without the help of a medium ; or mediately, 
which is by the help of a medium. The medium 
can be a natural one, a select article, and it can be 
an artificial one ; but it cannot be both at the same 
time, because the natural medium becomes artificial 
as soon as the lawmaker meddles with it. 

Exchanging through some select article is not 
different from exchanging without the help of any 
medium, because the select article is, or has been, in 



58 THE SOLUTION OF THE SOCIAL PROBLEM. 

all cases a common commodity and private prop- 
erty; it is exchanging product for product directly. 
Using the artificial medium, we exchange through 
public credit and power of law ; hence it is imma- 
terial what the tokens are made of ; the exchange 
is artificial and indirect; it consists in selling and 
buying. 

" Sell " and "buy" are from the languages of 
the ancient Goths and Saxons, and mean to give, to 
receive, i. e., exchange. We can now hardly com- 
prehend selling and buying without using money, 
but the originals of these words were in use before 
money existed. 

As we have seen, the present medium of ex- 
change is imperfect and unintelligible, in the 
tokens, particularly in the gold pieces, we still 
imagine the defunct select article. If you will bear 
in mind that about ninety-nine per cent, of the 
value of gold exists only in imagination, you will 
comprehend that the tokens, even if they are gold, 
are naturally but transfer tickets. 

A sale and a purchase constitute one exchange; 
selling is the beginning, buying the completion of 
it. The time intervening between sale and pur- 
chase may be but minutes, it can be years. During 
that time the seller is neither in possession of the 
article sold nor of the value of it ; but he holds 
transfer tickets which represent that value, and 
through which he can re-obtain it at almost any 
time and in the form desired. He who sells a 
horse, for instance, begins an exchange ; in buying 
a wagon — be that in the same hour or years later — 
he obtains the value of the horse in the form of a 



THE HIRING OF MONEY. 59 

wagon. The exchange is completed. He has ex- 
changed a horse for a wagon. The wage-worker in 
selling his labor begins an exchange. Instead of 
the product of his labor he receives transfer tickets. 
In buying food and clothes for his family he obtains 
the product of his labor in the form needed or de- 
sired. 

The fact of having given for the article bought 
the same amount of money received for the article 
sold proves nothing, because the medium is only an 
instrument; the exchange is only equitable when 
the article bought proves an "as much" to the 
thing sold. Equivalents are nothing. The word is 
from equus, equal, and valere, to be strong ; hence 
it means equal-strong, equal-value. Since the ex- 
change itself establishes that value, any two articles 
are equivalents so long as the exchanging parties 
consider them such. 

We see now that selling and buying are still 
the giving and receiving of old, only that we now 
give and receive by the help of a medium. The 
man of our illustration gave a horse and received a 
wagon. 

So far the system works all right, that is, the 
exchanges are effected without difficulty. But it 
does not afford equity, because we exchange by 
value, which is blindly. To secure to every pro- 
ducer the amount of his product we must adopt 

THE NATURAL BASIS OF EXCHANGE. 

Producing things for one another is performing 
labor for one another. Whether an article is raised, 



60 THE SOLUTION OF THE SOCIAL PROBLEM. 

or manufactured, or dug out of the earth, or fished 
out of the water, it is obtained through labor. Since 
labor is the natural and only condition by which 
things can be obtained originally, it is also the con- 
sideration in the exchange. Value has nothing to 
do with it. Nature will not give us a thing 
''cheaper " because it has but little or no value; if 
we want the thing we must perform the labor that 
will produce it; and since A is no more obliged to 
perform that labor for B than B is for A, exchanges 
are only then equitable when the labor is returned. 

Having found the natural basis of exchange, 
we are at once enabled to determine the "as much." 
When, for instance, the shoemaker gives a pair of 
boots to produce which required two days' labor for 
a table which also represents two days' labor, the 
exchange is equitable. Whether people call the 
boots and the table worth five dollars or five cents, 
or the one five dollars and the other five cents, 
is of no consequence. The exchange is* equitable, 
because it leaves each producer in possession of the 
amount he has produced. 

Let us, for further illustration, assume that a 
day's labor and one dollar are equals. Then, he 
who pays six dollars for a pair of trousers, for in- 
stance, gives the labor of six days for the trousers. 
If the total labor which has to be performed to pro- 
duce the trousers is that of six days, the transaction 
is equitable; if it required more labor to produce 
them, he gets them "cheap," that is, he gets some 
of the labor of other men for nothing; but if two 
days' labor has produced the trousers, he is cheated 
out of four days' labor : while he gives six days' 



THE HIRING OF MONEY. 61 

labor, he receives only two days' labor in return. 
Propose to any man that he shall work six days 
for you and that you will return the favor by work- 
ing three days for him, and he will laugh at your 
proposition. Why? Because he sees inequity. He 
knows that for a day's labor is due a day's labor. 
Tell him your labor is worth twice as much as his, 
and he will leave you in disgust. But let him do 
the six days' job and give him the six dollars, and 
he will give the six dollars for some article that has 
been produced in three days without a murmur. 
Why? Because, as he exchanges by value, he does 
not know that he gives six days' labor for three 
days' labor. 

Since there is hard labor and easy labor, and 
since capacity and industry differ with different 
men, it will be said that the labor basis will not af- 
ford equity. 

Is it not a fact that now the hardest labor com- 
mands the poorest pay? Then the labor basis can- 
not possibly make matters worse. The laboring 
classes do not suffer because of hard and easy labor, 
or different capacities, but because they are de- 
frauded through increasing the prices of their prod- 
ucts while they are in the act of being exchanged. 
The labor basis renders such adding of price imprac- 
ticable, because it throws " labor for labor " out of 
balance, and thus exposes the fraud. With this 
labor has won the battle. If, then, a man should 
occasionally lose some of his labor, he could afford 
to lose it, he would not miss it. But he cannot af- 
ford to lose two-thirds of all his labor, as he now 
does. 



62 THE SOLUTION OF THE SOCIAL PROBLEM. 

But the labor basis will afford equity in time. 
The labor required to produce a thing becomes the 
"price" of the thing; and since generally the same 
thing is produced by the same amount of labor, 
''prices" become stationary and commonly known. 
Since in most cases it requires as much labor to 
produce a poor article as it does to produce a genu- 
ine one, the labor basis will have the good effect of 
driving the trash out of the market. 

We must not suppose that an evil of thousands 
of years' standing can be cured radically in one day. 
Much is to be learned from experience. At pres- 
ent, labor cannot compete with capital, because it 
is enslaved. The labor basis liberates it. Then 
free competition will settle all difficulties that may 
present themselves in due time. 

RIGHT OF POSSESSION. 

All real property is produced by labor, and 
every producer is the bona fide owner of his prod- 
uct. Consequently, the producer, having made it, 
has the first right of possession. Things which 
others have produced become my property when I 
return the labor for them, for returning the labor 
makes it equal to having produced them myself. 
Nothing can become the property of another so 
long as the producer of it will not part with it. 
Consequently God's creations are not men's prop 
erty. Since A is no more obliged to produce 
things for B than B is for A, it is self-evident that 
nobody can accumulate more rightful property 
than the amount he produces and does not con- 



THE HIRING OF MONEY. 63 

sume. Any property above that is stolen property. 

" I inherited $50,000," says a critic; "is that 
stolen property?" 

" It is what it was before you inherited it." 

" Suppose I find a precious stone worth $50,000. 
Would that be stolen property? " 

In reality such stones are not property at all, 
because they have no intrinsic value. If you should 
find one, keep it and call it worth any sum you 
please. But the stone you cannot use. If some- 
body will give you $50,000 for it you are very apt 
to get possession of stolen property. The fact 
remains that nobody can accumulate more rightful 
property than the amount he produces above his 
consumption. 

If the labor of some expert produces a value of 
five dollars every day, while his expenses, all told, 
average five dollars a week, he will have to keep at 
work continually for over seven hundred and sixty- 
nine years to lay by the first million. You may 
now figure out for yourself how much rightful prop- 
erty there is in the piles of the millionaires. 



VI. THE REPRESENTATIVE OF 
LABOR. 



Medium and representative are correlates. The 
medium represents, and the representative is a me- 
dium through whom or which others act. Since 
the consideration in the exchange is labor, the 
medium of exchange is the representative of Labor. 

Hiring, buying and selling representatives is 
treason. 

Inanimate things cannot be guilty of treason, 
neither do I make such charges against the men 
who do hire, buy and sell money. Since law and 
denomination of them present the tokens as repre- 
sentatives of value and as private property, those 
men are not aware of the fact that they handle the 
representative of Labor. When we look at the prin- 
cipal (Labor) and its representative (money) as de- 
tached from persons, the following comparison will 
throw much light on the present situation of Labor : 

Whenever the representatives of a nation per- 
mit themselves to be hired, bought and sold, the 
representatives become the lords and masters of 
the people, or the tools of such, and the people 
become the victims of treason. If it pleases the 
pseudo-masters to tax the people to death to fill 
their pockets, the people have but the alternative to 
cast off the treacherous representatives, or keep on 
paying the taxes. 

64 



THE HIRING OF MONEY. 65 

So with Labor; its representative is hired", bought 
and sold. Labor is a victim of treason. The pseudo- 
master, calling itself capital, taxes Labor to death, 
and there is nothing left for Labor but to cast off 
the treacherous representative or keep on paying 
the tribute. (The manner of this taxation has been 
incidentally explained before. It is profits, interest 
and rent.) 

''Anything stamped and issued by the proper 
authorities for a medium of exchange is money." — 
Webster. As the private property of a Congress- 
man has nothing to do with his duties as represent- 
ative, so the value of the metal or material of which 
money is made has nothing to do with its represent- 
ing Labor. As a poor man will represent the people 
as well as a rich man, money made of lead or iron, 
etc., will represent Labor as well as that made of 
gold or silver. It is the stamp that gives the tokens 
efficacy. As a representative can only betray the 
party or body represented, so money, the repre- 
sentative of Labor, can only betray Labor. 

He who sells the product of his labor, sells it at 
market price, which is with interest added. The 
dealer buys goods for the sole purpose of adding 
interest and profits to the prices of them. The only 
one who cannot add interest is the wage-worker. 
He sells the bare labor, but sixty to seventy per 
cent, of the price of the things he buys is made 
up of interest and profit. He gives one hundred 
per cent, labor, but receives only thirty or forty per 
cent, labor for it. 

When a nation is betrayed, the people know it 
or soon find it out. Labor has always been be- 



66 THE SOLUTION OF THE SOCIAL PROBLEM. 

trayed, but has never found it out, because the 
laboring men themselves mistake the representative 
for the principal. That mistake must needs render 
political economy topsy-turvy. All credit given 
the money is due to labor ; money only represents 
labor. Labor is now the hireling of its servant, 
money; when it shall have gained its natural su- 
premacy, Labor will hire its servants. The repre- 
sentative affords luxury; the principal goes begging. 
The tax the treacherous representative imposes 
on Labor accounts for the inefficiency of 

STRIKES. 



The wage-worker's weal or woe does not rest 
as much with high or low wages as with the relation 
of wages and expenses. And it is the expenses that 
render that relation against him. If value were a 
reality so that anything could be proven by it, it 
would show that in most cases he gets fair wages. 
But his wages consist in transfer tickets, and, as we 
have seen before, for his tickets he receives only 
about one-third of the labor they represent. It is 
not the employer who robs him, but the investor. 
Hence, striking for higher wages is trying to com- 
pel the employer to make up for the investor's 
profits. 

This is impracticable. To make good the em- 
ploye's loss the employer would have to triple his 
wages. This would make him a bankrupt in a short 
time, if he were not to add correspondingly to the 
prices of the articles manufactured ; and by making 



1HE HIRING OF MONEY. 67 

that addition — if he could sell at such prices — the 
consumer would lose what the producer gains. 
Higher wages increase prices ; higher prices increase 
expenses, and the higher expenses induce or force 
others to strike for higher wages. After all have 
struck and every strike has been a success, the labor- 
ing men are worse off than before, because the 
higher prices have raised the investments, the very 
thing that robs them. 

This will be seen more plainly when I illustrate 
the passing over of an article from manufacturer to 
consumer— a pair of trousers, for instance. The 
wholesaler's profits are generally moderate. The 
retailer adds forty to eighty per cent to cost. To 
make the illustration simple I will average the per- 
centage at twenty. 

The manufacturer's cost of produc- 
ing the trousers we will set at $3.00 
The manufacturer adds 20 per cent .60 



Which makes the wholesaler's cost - 3.60 
The wholesaler's addition, 20 per cent, .72 



Brings the retailer's cost to - - - 4.32 
And the retailer's 20 per cent, - - - .86 



Swells the consumer's cost to - - 5.18 

Paying $5.18 for the $3.00 trousers, the con- 
sumer pays capital a tax of $2.18. Now, the tailors 
have a successful strike, in consequence of which 
they receive 50 cents more for making a pair of 
trousers. This brings the first cost of the trousers. 



68 THE SOLUTION OF THE SOCIAL PROBLEM. 



To ------ 

Manufacturer's 20 per cent 


#3oO 
- 7o 


Wholesale cost - 
Adds 20 per cent. 

Retailer's cost - - - - 
Adds 20 per cent. - 


- 4.20 

.84 

5.04 

- I.OI 



Consumer's cost - $6.05 

Paying $6.05 for the $3.50 trousers, the con- 
sumer pays capital a tribute of $2. 55, which is 37 
cents more than before the strike ; and he pays 87 
cents more for the same article. The results are : 

Producer's gain - - - 50 cents. 
Consumer's loss - - - - 87 " 
Capital's gain - - - 37 " 

The blow was aimed at capital, but hit the con- 
sumer, while capital comes out a gainer of thirty- 
seven cents per three dollars product of the tailors. 
Capital's gain is apt to stay, but the striker's gain is 
temporary, because the effects of increased invest- 
ments will come home sooner or later ; and the 
temporary gain will seldom, if ever, make up for the 
time lost during the strike. Since the consumer 
(every producer is a consumer) loses more than the 
producer gains, strikes must needs deteriorate the 
laboring men's condition. 

The present wage system is the embodiment of 
treason, because the representative hires the prin- 
cipal. When Labor shall have become aware of its 
supremacy, the principal will do the hiring and the 
system will become an entirely different one. 



THE HIRING OF MONEY. 69 

Mistaking the representative for the principal 
accounts for the periodical 

STAGNATIONS OF BUSINESS. 

It is commonly believed that overproduction is 
the cause of the stagnation. This is not the case. 
Overproduction is itself but an effect. So long as 
the producer is deprived of two-thirds of his prod- 
uct he is compelled to produce three times as much 
as he consumes. Since the non-producing class, 
being a small minority of the people, cannot con- 
sume two-thirds of the sum total produced, the sur- 
plus fills the storehouses. Hence, as long as the 
producers are deprived of more than the non-pro- 
ducers can consume, overproduction is unavoidable. 

" To do business we must have capital." And 
we have it, or, rather, it has us. As we have seen 
before, capital is a queer thing. Although inani- 
mate, it is active and productive, and, like a man, it 
is invested, and, like a horse, it must be fed. The 
horse grows to his natural size and the same 
amount of food will then always satisfy him. But 
capital has no natural size ; it grows as long as it is 
fed and accordingly as it is fed ; the more it is fed 
the bigger and the more hungry it gets. When 
finally we can no longer satisfy its hunger it be- 
comes timid, shy, discards investment, ceases to act, 
and thus produces a stagnation. 

Capital feeds on or through consumption. With 
every dollar's worth the consumer buys he pays it a 
tax of sixty to seventy cents. As a whole, capital 
swallows about sixty-five per cent, of the total dis- 



70 THE SOL UTION OF THE SOCIAL PROBLEM. 

bursement. Whether capital is large or small, it 
gets the same amount of food, namely, sixty-five per 
cent, of the total disbursement. On that amount of 
food capital grows rapidly ; but consumption in- 
creases slowly, if at all. Hence, capital outgrows 
proportion ; the point must come when the sixty- 
five per cent, of the total disbursement will no 
longer cover the interest on the capital. This is the 
cause of the stagnation. 

PARADIGM, 

SHOWING HOW CAPITAL BRINGS ABOUT STAGNA- 
TION IN BUSINESS. 





A 


B 


C 


D 


E 




No. of 


Total 




Percentage 


Required 


Year. 


Fam- 


Disburse- 


Capital Tribute. 


of 


for 




ilies. 


ments. 




Capital. 


Interest. 








% 60, OOO 






I 


500 


$300,000 


120,000 
180,000 


200 


$ 6,000 


2 


505 


202,000 


121,200 
301 , 200 


67 + 


18,000 


3 


5IO 


204,000 


122,400 
423,600 


40+ 


30,120 


4 


515 


206,000 


123,600 
547,200 


29+ 


42,360 


5 


520 


208,000 


124,800 
672,000 


22 + 


54,720 


6 


525 


210,000 


126,000 

798,000 


19— 


67,200 


7 


530 


212,000 


127,200 
925,200 


16 + 


79,800 


8 


535 


214,000 


128,400 
1,053,600 


14— 


92,520 


9 


54o 


2l6,000 


129,600 
1,183,200 


12 + 


105,360 


IO 


545 


218,000 


130,800 
1,314,000 


II — 


118,320 


ii 


55o 


220,000 


132,000 
1.446,000 


IO+ 


131,400 


12 


555 


222,000 


133,200 
t, 579, 200 


9+ 


144,600 



THE HIRING OF MONEY. 71 

I will try to illustrate this. We send a number 
of families — say five hundred — out somewhere to 
settle by themselves, but we remain near enough to 
them to watch and see how capital is doing their 
business. We give them household goods, seeds, 
tools, farming implements — enough of everything 
necessary to make a new beginning; as also pocket 
money averaging ten dollars per family. The total 
disbursement averages four hundred dollars per 
family, the increase of population five families 
annually. 

The business men among them have invested 
in groceries, hardware, machines, etc., a capital of 
sixty thousand dollars. We set the receipt of cap- 
ital at sixty per cent, of the total disbursement^ 
allowing the balance for expenses. 

It cannot be supposed that the figures in our 
illustration give in all cases correct amounts, be- 
cause every dollar capital gets is not straightway 
invested. On the other hand, the investor is not 
bound to the legal rate of interest in his operations. 
The illustration is only to show the modus operandi. 

Now, to watch the progress of business, take a 
look at the paradigm. The figures in column A 
give the number of families; those in B the total 
disbursements; the upper ones in C the capital 
invested, and those below them the tribute or sixty 
per cent, of the total disbursement ; those in D give 
the same tribute in percentage of capital ; and those 
in E the sum required to cover the interest on the 
capital. 

During the first year the five hundred families 
expend two hundred thousand dollars. Of this cap- 



72 THE SOLUTION OF THE SOCIAL PROBLEM. 

ital draws sixty per cent, or one hundred and 
twenty thousand dollars, which is a percentage of 
two hundred. The sum required for interest on the 
capital (under a ten per cent, rate) is six thousand, 
as shown in column E. 

Swallowing one hundred and twenty thousand 
dollars during the first year, capital has grown to 
one hundred and eighty thousand dollars to begin 
with the second year. The technical part needs no 
farther explanation. 

The reason that the first year capital gets such 
a big percentage is because it is small in proportion 
to the disbursement. If the capitalists had twice as 
much invested the percentage would only be one- 
half of that, for the reason that the people will not 
buy more because more is invested. 

Looking over the figures in column D, we no- 
tice that the percentage shrinks continually. This 
indicates the approach of a stagnation, for when- 
ever the percentage sinks below the legal rate of 
interest capital will — strike. Those who do not 
wish to figure percentage will observe the same 
thing by comparing the lower figures in C with 
those in E— tribute with interest. 

Whenever the tribute falls short of covering 
the legal interest the stagnation begins. 

Comparing the figures in B with the upper ones 
in C — disbursement with capital — wc see the cause 
of that shrinkage. Capital is outgrowing its pro- 
portion to the disbursement. While in five years 
the disbursement has increased but four per cent, 
capital has increased one hundred and eight per 



THE HIRING OF MONEY. 73 

cent., to one hundred and twenty-four thousand 
eight hundred dollars. 

Here it may be asked, How could they invest 
that much money? Have they discovered a gold 
mine ? 

No, nothing of the kind. The figures headed 
"capital" represent the booty. taken from labor, 
and that booty consists of products of labor. All 
the money in the colony amounts to five thousand 
dollars, and even this is not invested, but circulates 
among the people. A dollar can be passed several 
times in one day, and every time a dollar's worth is 
bought a value of sixty-five cents cleaves to the 
fingers of the investor. Circulating the money they 
do have forty times a year — which they must do in 
order to buy forty dollars' worth of goods per fam- 
ily — they turn over products to the amounts given 
under the head of tribute- The investment is a de- 
ception, capital a nonentity ; but the interest on it 
is a terrible reality ; in the collateral year it amounts 
to sixty-seven thousand two hundred dollars, as we 
see in column E. 

Since the capital consists of products of labor, 
we see by the upper figures in C that now, at the 
beginning of the sixth year, the colonists have over- 
production amounting to six hundred and seventy- 
two thousand dollars, but this does not interfere 
with business, because the tribute still affords a per- 
centage of nineteen. 

Five years more, and the percentage is down 
to ten. The investor has an idea that ten per cent, 
is due him on the investment without bending a 
finger for it ; but now he must even pay expenses 



74 THE SOL UTION OF THE SOCIAL PROBLEM. 

out of the ten per cent. Hence the shingles begin 
to appear: " Selling out at cost," " Bankrupt sale," 
etc. The manufacturer cuts down wages — all in 
vain. One year more, and the percentage is down 
to nine. The sheriff becomes an important person- 
ality in business ; the manufacturer closes his doors 
and turns the laboring men out into the cold. 

The colony has produced ahead to the amount 
of one and one-half millions, which is enough to 
last them for years to come. But, lo ! the treach- 
erous representative has percentaged them out of 
the whole of it. A number of investors, who have 
not produced one particle of it, claim to be the own- 
ers of it and hold it in their grip. Instead of enjoy- 
ing the fruits of their labor the producers of that 
wealth must tramp and beg, or steal, or starve. 

This is the way capital is doing the business. 

A ten per cent, rate of interest runs business to 
the ground in twelve years, a five per cent, in 
twenty-three, a four per cent, in twenty-eight years. 
The average percentage in the United States is 
about seven, which produces a stagnation in about 
twenty years. Since the mind is encumbered and 
the exchanging is done by value, the laboring man 
does not know that he is continually deprived of 
the larger part of his product; but he does know 
from experience that he finds employment as long 
as the investors can dispose of their booty. Hence 
his reasoning on the subject is virtually this : 

If we could export our clothing and shoes we 
might dress up and be gay ; but if we must wear 
them ourselves we have to go ragged and bare- 
footed. If we could export our wheat, beef, etc., 



1HE HIRING OF MONEY. 75 

we might feast ; but if we have to eat them up our- 
selves we must starve. If we could export our 
wood and coal, we might make ourselves comfort- 
able in the cold winter behind a warm stove ; but if 
we have to burn them up ourselves we must freeze, 
etc. What a pitiful thing man is when in the hands 
of a phantom ! When Labor shall hold its own the 
laboring man will never suffer want; and as the in- 
vestor will not have anything to eat, much less to 
sell, the clamor for markets will cease. 
A short resume will now give us 

THE ORIGIN OF THE ECONOMIC EVIL 

in a nutshell. The practice of exchanging articles 
is older than civilization. Savages exchange things 
occasionally, and they can only exchange blindly. 
" How much will you give me for this ; how much 
will you take for that ?" is all there is to it. .This 
"how much" is the idea of the old Latin valere, 
value. 

The step from independent production to the 
mutual mode is the passing over from savage life to 
civilization. As a matter of course, this has been a 
slow process ; mutual production has been adopted 
gradually. During that time, which evidently com- 
prises centuries, the people exchanged in that 
blind way. Since a good part of the then few nec- 
essaries of life consisted in free gifts of nature, and 
since there was no capital to be fed, the work they 
had to do was but little and was more sport and 
pastime than labor. 

Hence a basis of exchange was not needed, not 



76 THE SOLUTION OF THE SOCIAL PROBLEM. 

thought of. By the time labor had become a factor 
and presented itself as the natural basis of exchange 
the valere or value had become a fixed something 
in the mind, and, as the people had always ex- 
changed that way, they did not know but value is 
the proper and only thing to exchange by. Through 
this the natural basis got lost ; it has never been 
found. The mistake has not been detected, and the 
people exchange their products in the same blind 
way up to this day. 

Blind exchange opens the door to cheating and 
fraud, and this made it possible that a formidable 
system of robbery could and did develop in polit- 
ical economy. That system manifests itself in the 
form of profit, interest and rent — all of which are 
means to get something for nothing, and none of 
which is practicable under equitable exchange. 

As long as exchanges were of infrequent occur- 
rence and for the most part optional, the lack of the 
basis affected the producers only individually. Col- 
lectively, it left the product to the producer. The 
trouble began when exchanging products had be- 
come a necessity and a select article was required. 

With blind exchange the select article results in 
usury and hoarding. Since it is easier to pocket 
products of others than to perform the producing 
labor, usury was now cultivated and practiced in 
different ways and forms, which finally resulted in 
the above-mentioned system of robbery. 

The necessity of exchanging products gives the 
medium of exchange a reciprocal impetus. The 
more it is accepted, the more it is sought; and the 
more eagerly it is sought, the more readily it is ac- 



THE HIRING OF MONEY, 77 

cepted ; each increases the intensity of the other. 
This produced the first clog in the brain, for the 
people mistook that impetus for an effect inherent 
in the metal. 

Exchanging blindly, the producer has no means 
of knowing that he is continually deprived of the 
larger part of his products. But he sees that the 
usurer, although he does not produce anything, 
accumulates wealth, while the producer remains 
poor. This created another big clog in the brains, 
for the people mistook the ability to accumulate 
without producing for some mysterious power in- 
herent in the metal or money. 

To strengthen such beliefs, to hide the fraud 
more securely, the usurer used idiomatic expres- 
sions, such as investing money, productive capital* 
and the like absurdities. The people took these 
phrases literally, or, rather, they accepted the ideas 
the usurer thus advanced for facts. This finally 
clogged up the brains to such an extent that logical 
reasoning on the subject was no longer possible. 

The phantom, money power, had matured, 
taken hold of the reins of government, and become 
the sovereign governor of political economy. This 
is the climax of the economic evil. 

When coming generations shall read history 
and find an account of our management of political 
economy they will stigmatize the nineteenth cen- 
tury as "the age of folly." 



VII. THE LAND QUESTION 



"All men are born free and equal and endowed 
by their Creator with certain inalienable rights, 
among which are life, liberty and the pursuit of 
happiness." The paramount of these rights is life, 
for no rights can be of any use to us unless we live. 

Life by itself is divine; it is given to us and it 
is taken from us independent of our will. Hence, 
by "right to life" we understand only the right to 
sustain life, the right to produce what we live on. 

Inalienable rights cannot be transferred nor 
destroyed, but the opportunity to exercise them 
can be cut off. And this is done when we assume a 
property in God's creation. 

The Earth is our God-given home and the cor- 
nucopia of all means of existence. In its bowels 
are stored up the minerals; its waters abound with 
fish ; its surface contains the powers of engendering 
and maturing grain, fruit and vegetables ; it con- 
tains and brings forth all the elements out of which 
labor produces that which supports life and affords 
comfort. The Earth is the mother, Labor the father 
of all means of existence. Hence: — 

Depriving a man of the free use of land is de- 
nying him the right to exist; selling land is like the 
fish selling the pond to some of their fishy mem- 
bers ; paying rent for land is paying for permission 

78 



THE HIRING OF MONEY. 79 

to exist; assuming a property in land is robbing 
God and men — God of his property, men of their 
inalienable rights. 

The Earth will not give us any of its treasures 
without labor ; land will not yield grain without 
tillage. A man might have the whole Earth to 
himself, but, unless he go to work and produce 
means of existence, he will starve and perish. Then 
what is the object in holding land for property? 

The object is to make labor tributary; land is 
bought because "money seeks investment." The 
more essential to existence a thing is, the safer it is 
to invest in. Since human existence without land 
is not even imaginable, land is the best thing to in- 
vest in. 

Holding the land for property is of more im- 
portance and more criminous than all the rest of the 
investing put together. While the other invest- 
ments rob the laboring man of the product of his 
labor, investing in land deprives him even of the 
opportunity to produce. Through this, the landless 
can only exist by permission of the landholders. 
This gives the system of robbery stability and per- 
petuity. If the land were free, that system of rob- 
bery would fall, because any one could escape it by 
simply withdrawing from the mutual mode of pro- 
ducing. The laboring men could withdraw in 
groups and thus have the benefit of mutual produc- 
tion to some extent and still be out of the reach of 
investors. 

But now the landgrabber holds the laborers 
while the investor robs them ; they can no longer 
escape, but they must submit to being invested out 



80 THE SOLUTION OF THE SOCIAL PROBLEM. 

of all they can or will produce. This reduces the 
majority of the people to mere permissionists in 
their own God-given home. Wherever they go, 
wherever they put a spade or a plow into the soil 
they must pay for permission. 

The air we still inhale free, and sunshine costs 
us nothing ; but not because God has made the sun 
and the air free to all— this is also the case with the 
land — but because they cannot be grabbed. If they 
could be seized and withheld from us, they would 
have been invested in long ago, and we would have 
to pay at least the price of gas for sunlight, and 
have to pay for every breath we draw, or suffocate. 
On what ground of right is land held for prop- 
erty? 

" I have bought it and paid for it." 

Yes, you got it through exchange, but we have 
seen before that the mere exchange does not prove 
property. As to land, how did it get into the mar- 
ket? A thing belongs to its maker until he has 
disposed of it. The wagon-maker, for instance, is 
the owner of the wagons he has made, even if he 
has made them for public use. As long as he re- 
fuses to sell them, they cannot be bought; and the 
only way to get them into the market is to steal 
them. But in this case the maker remains the bona 
fide owner of them ; the seller is a thief, and the 
buyer, if he knows that the maker has not disposed 
of them, is as much a thief as the seller. 

So with the land. Unless you prove that the 
Creator disposed of it, the land is still His, and all 
men are equally entitled to the usufruct of it ; prop- 
erty in land is stolen property, and the buyer is as 



THE HIRING OF MONEY. 81 

much a thief as the seller. Your deeds and titles 
lack the original patent. All that you can prove by 
them is that the government is the original thief. 

If the mind was not incumbered and a small 
minority of the people would say, (as they now vir- 
tually do say), "This world is ours, and if you want 
to live in it and raise your victuals on its soil you 
must buy a piece of it from us, or pay us a rent for 
using a piece of it," we would simply ignore such 
arrogance, or, in case of need, put that little minor- 
ity into a lunatic asylum. But now all are actuated 
by a phantom, capital, and this makes landgrabbing, 
and with it the whole system of robbery, possible 
and practicable. 

"The land shall not be sold forever; for the 
land is mine; for ye are strangers and sojourners 
with me." Levit. xxv : 23. 

In Moses' time the artificial medium did not 
exist, and the ancient Hebrew has no equivalents 
for " sell " and " buy." The kanah % which the trans- 
lators have rendered " sold," means to erect, to 
establish, to acquire. The land was then let to in- 
dividuals for a term of forty-nine years. At the 
end of that time it reverted to the government, and 
was let anew. Hence it was held under what we 
call a government lease. Since nobody owned 
land, nobody could sell land. A man could only 
transfer his lease for the remaining time he had in 
forty-nine years. The meaning of the original text 
is: "the land shall not be leased forever." Leasing 
it forever is forbidden, because it is of the same ef- 
fect as our selling it. 

Serious a matter as landgrabbing is, it is only 



82 THE SOLUTION OF THE SOCIAL PROBLEM. 

part and parcel of that system of robbery. Since 
the natural basis of exchange wipes out that system, 
it cures also this part of the economic evil, because 
without that system of robbery property in land 
has no longer an object. 

STATE AND GOVERNMENT. 

The original form of the state is monarchial, 
but not the monarchy of to-day. Originally, the 
man who was best fitted for the post was chosen, or 
rather became through his fitness and capacities, the 
leader and umpire of the tribe or nation. 

The modern chief gets his office through in- 
heritance. This excludes fitness and capacity. The 
imbecile, the wretch, becomes the ruler of the 
nation, whenever he happens to be the heir. Form- 
erly only the idolized emblems (crown, scepter, 
throne) were inheritable, but it is a sad circumstance 
that in the course of time the government of the 
people has become annexed to them like an unim- 
portant appendage. 

The feudal system, which took its beginning in 
the fifth century, created a caste, or castes, known 
by the collective name of Blueblood. Holding the 
control over the land, being invested with outrageous 
privileges, and having jurisdiction and power of 
taxation in their own hands, the Bluebloods became 
the stain and bane of the country and a terror to the 
people. Their life was one of licentiousness, revelry 
and carousal, while the peasantry were taxed to 
death to foot the bills. 

The peasant saw his growing fields tramped 



THE HIRING OF MONEY. 83 

down by the Bluebloods' horses, while he could not 
say a word in defense of his property without being 
lashed, or imprisoned, or killed for it. The people 
were deprived of any and all rights. In his history 
of the feudal system, Chambers says : " that a feudal 
lord, on his return from a chase in winter, disem- 
boweled a vassal, that he might keep his feet warm 
in the reeking trunk during the evening revel." 

Such circumstances have a tendency to open 
the eyes of even the dullest. To guard against this, 
the canard was invented that God himself had 
ordained such infernal government. What a blas- 
phemy ! However, believing that their misery was 
providential, the people bore it with remarkable 
patience. 

Still freedom is natural and the desire to enjoy 
it. cannot be entirely eradicated from the mind. It 
revived again and again until finally some nations 
cast off the despots and the Bluebloods, and took 
the reins of government into their own hands. Are 
these now free men? 

I venture to say that a more perfect democracy 
than laid down in the Constitution of the United 
States of America has never exited. Every article 
of that instrument says virtually, " the will of the 
people shall be the law." That will is expressed at 
the polls; the principal officers are chosen by popu- 
lar elections. Since you laboring men constitute a 
large majority of the people, the government lies in 
your own hands. There is not an officer in the coun- 
try but has received his office directly or indirectly 
from your hands ; there is not a man in our legisla- 
tive bodies but you have sent him there. What 



84 THE SOLUTION OF THE SOCIAL PROBLEM. 

more is there obtainable for you in the line of 
politics? 

Yet you complain of oppression and extortion; 
you claim that a money aristocracy have taken the 
places of despots and Bluebloods. How do such 
things become possible since you cast the majority 
vote? Are that handful of men, the money aristoc- 
racy, stronger than the laboring masses? 

True, there now exisists a powerful subjugating 
machinery, viz. : police, constabulary, sheriffs and 
other catchpolls ; shackles, chains, and other fetters ; 
calabooses, jails, penitentiaries and other dungeons ; 
the gallows and its equivalents; and finally the 
soldier, for even he is degraded to a tool of oppres- 
sion. But is not that machinery composed of labor- 
ing men or men of that class? Is not the power in 
it your own power? The laboring men are the 
nucleus of any nation. The state has no power but 
that residing in the laboring men. 

It is not a money aristocracy that oppresses 
and abuses you, but the phantom of capital. That 
phantom rules through you ; it rules the state be- 
cause it rules and actuates you individually. As the 
Puritans killed one another to fight witches, so you 
kill one another to fight capital ; and as the witches 
prevailed until they were found to be a delusion, so 
capital will prevail until you shall have found that it 
is a nonentity. 

We are our own oppressors. Sound-minded peo- 
plecan not be held in subjection, notevenby superior 
force, for they will rather die in defense of their rights 
than eke out the miserable existence of a slave. But 
as long as the mind is enslaved, freedom is impossible. 



CONCLUSION. 



Considering that civilization is now a mass of 
confusion and corruption, we might conclude that 
to bring about natural order would be an enormous 
task, if not an impossibility. But this is not the 
case. All that confusion has grown out of one 
single cause, namely, blind exchange. If we simply 
remove that cause, i. e. y adopt the natural basis of 
exchange, that confusion will disappear; everything 
will be cured radically and forever. 

The only question is : Will our distorted minds 
permit us to take that step ? *I am not able to an- 
swer this question, but I have one consolation : 
Nature cures every evil itself. In nature, there is 
neither cessation nor retrogression. Any evil will 
diminish or die out, or it will grow and keep grow- 
ing until it becomes unbearable. Then nature will 
throw it off in some way. The economic evil is 
almost unbearable now and is growing more so 
every year. Hence its end cannot be far off. We 
can only decide whether we will take the step and 
thus cure the evil without war and bloodshed, or 
leave it to nature and thus be galled with wars and 
rebellions unceasing until its end shall have come 
through them. 

When finally the fog which now envelops our 
understanding shall have cleared away, the long- 



86 THE SOLUTION OF THE SOCIAL PROBLEM. 

wished-for happiness in freedom, justice and equal- 
ity will come. There will be no capital and, conse- 
quently, no system of robbery. Property in land 
will no longer have an object ; riches will lose not 
only their charm, but even themselves. Hence, 
nobody will yearn for money, nobody will work "to 
make money ;" there will be time for rest and 
enjoyment, and, with God's creations free and 
accessible to all, the people will grow healthy and 
strong in body and mind ; the better emotions of the 
heart will revive and become the governing spirit. 
Hence, demoralization will die with the phantom that 
bore it ; crime will be a rare exception or cease en- 
tirely ; and penitentiaries, poorhouses and lunatic 
asylums will stand only as memorials reminding 
coming generations of the terrible phantom under 
which humanity now suffers and groans. 



APPENDIX. 



"What shall take its place? You tear down the 
present system but you fail to build up a new one." 

Since writing this pamphlet I have been asked 
questions similar to the above. The experience we 
have had with the present economic system affords 
something of a negative guide in building up a new 
one, but many a conclusion can only be got by experi- 
menting. As the ancient Romans were led to reject 
animals for bronze, so with things in the production 
of which nature and labor co-operate we shall have 
to reject value for labor until experience shall have 
established the corresponding denominations. 

I shall not undertake to give a description of 
the coming system. I only propose a new founda- 
tion for it; namely, the natural basis of exchange. 
So long as we build on that foundation the new 
structure cannot prove a failure. We may have to 
tear down parts and rebuild them, but in the end 
we shall have the perfect system. My object is only 
to present the matter for public discussion. Public 
discussion will either kill the proposition or bring 
out a definite plan for the new system. We must 
build up as we tear down, so as not to bring about 
an economic chaos. 

Since our errors respecting political economy 
are as old as civilization and have become '' second 

87 



88 THE SOLUTION OF THE SOCIAL PROBLEM. 

nature " to us, we can not expect to build up a per- 
fect system in one year or even in one generation. 
We can only make a beginning, and we can not 
progress any faster than study and experimenting 
will relieve us of our mental incumbrance. It is 
inevitable that some of the first results of adopting 
a new basis of exchange will be somewhat un- 
palatable, but the results will be better and better 
every year. However, generations will probably 
come and go before the best results will have been 
realized. 

I will now give a few hints which may aid in 
establishing a better system. I said, adopt the nat- 
ural basis of exchange, and all else will come to a 
natural order of its own accord. By this I do not 
mean to say that we could not or should not do any- 
thing toward hastening on a better state of affairs. 

It would be poor policy to let wrongs be wrongs 
until they right themselves. We want to act, aid 
natural development as much as we can ; but we 
want to do it in a brotherly spirit, remembering that 
the laboring man himself is as much to blame for 
his misery as anyone else. 

Respecting property, labor can hardly do an in- 
justice. The vast wealth now held by a compara- 
tively few individuals is the aggregated product of 
labor. The war of "labor vs. capital " is a conten- 
tion of producer against product. If labor should 
take all that labor has produced it would only take 
its own. All the wealth now existing would not 
cover the loss labor has suffered during the present 
economic system. But the laboring men who have 
contributed to that wealth can not be compensated ; 

LtfC. 



THE HIRING OF MONEY. 89 

millions of them are dead. Hence, wealth that has 
taken on a public character, like railroads, for in- 
stance, becomes by the nature of the case public 
property, and I deem it proper and right for the 
state to declare it such. Compensation can not be 
demanded, because that wealth is booty taken from 
labor. 

By "state" I mean the whole people organized 
into a political body. 

All means of existence are derived from land; 
human existence without land is impossible. Since 
the Creator never disposed of his land, all men are 
equally entitled to the usufruct of it. Hence, it is 
proper and right for the state to declare the land 
free, assume superintendency over it, and thus re-in- 
state the landless in possession of their God-given 
home. 

The returning of land to its owner, the Creator, 
does not interfere with farming ; it only cuts out 
land speculation. A permit or lease issued by the 
(to be established) land-office, will protect the farmer 
in all real rights, as much as his defective title (all 
land deeds lack the original patent) does now. Free 
land affords the opportunity to all who wish to farm, 
and secures a home to all who desire a home. 

As explained before, the universal system of 
robbery consists in interest, profit and rent. The 
rent system, although but a consequence of the in- 
terest and profit system, has become the chief factor 
in keeping the laboring masses in poverty. If the 
laboring man could hold his own he would soon have 
the means to build a house for himself, and through 
this the rent system would die a natural death. 



9 o THE SOL UTION OF THE SOCIAL PROBLEM. 

Under the labor basis of exchange the laborer 
could no longer be robbed through the profit system. 
He would, however, still have to pay rent, for some 
time at least, for that basis would only kill the rent 
system gradually. Since, in fact, the laboring-man 
pays rent for his own bona-ftde property, I take it to 
be the duty of the state to abolish the rent system 
at once. 

The state has no right to meddle with tools or 
other private property. The producer is the ex- 
clusive owner of his product. When all men shall 
have equal opportunity to produce, each one will be 
sure of the full amount of his product and will be 
free to use it or dispose of it as he sees fit. Then, 
and only then, shall we be a free people. There is 
no such thing as freedom without individual inde- 
pendence. The slave is not a free man because he 
lives in a free country. 

At present we propel the ship of state against 
the stream. This requires much force and con- 
sequently much taxation. Under a natural order 
of the state the ship floats with the stream ; a good 
pilot, with the help of a few assistants, keeps it in 
its proper course, and taxation amounts to nothing 
in comparison with the present rate of taxation. 

We need not mind capital. The natural basis 
of exchange secures the product to the producer. If, 
then, capital exists and is productive, let the capitalist 
have all it produces. All that the laboring man 
asks, and all that he needs, is the product of his own 
labor. 

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-HE MONEY PROBLEM MADE PLAIN 



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